Creation of Costing Model and Database

Background:

The company had recently merged with another international business and was undergoing a major change programme. This was branded a new way of doing work and had a team dedicated to introducing new processes and practice to the combined business. One aspect of this was to standardise the way in which costs could be gathered and shared across the company and the way in which project budgets were calculated and assessed.

Charles McKay EFM Case Study costing model

Challenge:

The challenge was to provide a database of costs accumulated from across the business given diverse departments and a template for how projects were to be costed and evaluated.

Solution:

By using a shared database (Lotus Notes), each department across the business was able to enter the latest prices for services and products (for example the cost of trucks, trailers and rent) which provided more immediate access to users assessing new opportunities, and reduced the number of individual enquiries to those departments.

A costing model was developed alongside the database which standardised the way in which project costs were constructed and provided a number of prompts for the users to ensure that all costing elements were thought about in building that project. Once the user had gone through the questions and entered costs, the project could be measured against the internal hurdle rates set by the business.

Benefits:

The creation of both a database and a common model had the impact of speeding up the process of providing costs and quotes to customers. From individual departments point of view they could provide clarity on latest prices and reduce the number of enquiries they received. For the users of the costing model, it provided not only a consistency but also a checklist of items to be considered when building a budget for a project.

Case Study: Charles McKay