Public Sector Governance and Accountability Series: Budgeting and ...

Activity-Based Cost Management in the Public Sector 233
Ironically, process flowcharts do not always stimulate the questions and
thinking that ABC/M stimulates. The process view, which is time sequenced,
does not give much visibility to the varying mix of outputs and different
types of recipients that truly cause the need for additional activity costs.
Process flowcharts are mix blind. They simply map steps without adequate
insight into who or what uses the steps. Because greater differences and variation
of outputs cause higher costs, seeing the cost relationship becomes
valuable. Because process flowcharts do not shed much light on variation,
ABC/M becomes the solution to provide that needed visibility.
Admittedly, if process flowcharts include only the constituent activity
costs, employee teams may come up with some suggestions.After all, processbased
thinking is a major leap over the hierarchical organizational (stovepipe)
thinking that is now recognized as old thinking. But the primary
interest for any analytic exercise is to stimulate employee teams and managers
to be innovative. ABC/M is stronger at accomplishing this than is the process
view of costs.
Note
Gary Cokins can be reached at garyfarms@aol.com.