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Activity-Based Management for Financial Institutions: Driving Bottom Line Results

Activity-Based Management for Financial Institutions: Driving Bottom Line Results

Brent J. Bahnub, Gary Cokins (Foreword by)

ISBN: 978-1-119-19982-3 October 2015 224 Pages


Discover how to use activity-based management to improve your bottom line

The first book of its kind to focus on activity-based management in the financial services industry, Activity-Based Management for Financial Institutions: Driving Bottom Line Results will show you how to drive changes to your organization's bottom line.

After providing a brief overview of a financial services activity-based costing model, this book focuses on how to directly improve net income, covering essential topics including costing, chargeback, and pricing; implementing ABC; implementing ABM; managing organizational change; and avoiding pitfalls.

  • Written for those in the financial services industry-banks, securities firms, insurance companies
  • Reveals how to drive benefits to the bottom line through disciplined execution of activity-based management and organizational change management
  • Provides real world examples and tools for quick results and sustained success

This one-of-a-kind book will take your financial institution from stuck to financially successful, driving profitability and performance.

Foreword ix

Preface xv

About the Website xix

Acknowledgments xxi

Chapter 1 What Are ABC and ABM? 1

What Is ABC? 1

What Is ABM? 7

Chapter 2 Costing, Chargeback, and Pricing 13

Define Your Objectives 13

Costing: Absorption Choices 19

Costing: Driving Costs from Support Areas 24

Chargeback 27

Rates 34

Bank Branch Profitability 41

Pricing 44

Chapter 3 Implementing ABC 55

ABC Implementation Guiding Principles 55

Model Rules, Assumptions, and Design Documents 59

Driver Decisions 60

Attribute Decisions 62

Level of Detail Decisions 66

Tools 69

Activity and Driver Dictionaries 70

Putting It All Together: An ABC Example 72

Chapter 4 Implementing ABM 83

Structuring the Organization and Process for Success 83

Differences between ABM and ABC Staffing 100

Project Portfolio Management 101

Driving Results 107

Additional Considerations for Financial Services 113

Chapter 5 ABC/M in Shared Services 121

Starting ABC/M with Shared Services 121

Communication Barriers 122

Expected Dialog for Planning 124

Integrating the IT Model 129

Driving Value within Shared Services: IS Examples 137

Chapter 6 Managing Organizational Change 143

Importance of Organizational Change Management 143

Organizational Readiness and Overcoming Resistance 145

Your Role as Change Agent 153

Chapter 7 Avoiding the Pitfalls: Lessons Learned 161

ABC Lessons Learned 161

ABM Lessons Learned 171

Chapter 8 Beyond ABC/M 179

Portable Skills 179

Adjacent Careers 184

In Conclusion 189

Appendix ABC Model and Cost Object Reporting Rules and Assumptions 191

Modeling Rules and Assumptions 191

Cost Object Reporting Rules and Assumptions 193

Index 195