ABC, Work-Life Movement at the Center with Krifa

CES assisted KRIFA, a member organization, in developing an ABC analysis (Activity Based Costing) to map their cost structure and profitability of their services. In light of a strategic change aimed at countering a decline in membership, KRIFA needed to understand the actual costs of the various membership packages they offered.

The analysis was conducted by combining members' valuation of KRIFA's services with the costs of delivering these services. This provided the necessary insight to transform the organization from a traditional union to a work-life movement that more closely follows each member throughout their entire working life.

The development of the model involved several steps, including analyzing available data, building an organizational structure, conducting interviews, and handling special conditions. An example of such a special condition was the need to divide case processing into services provided to individual members to gain deeper understanding.

The model also had to meet specific requirements from KRIFA's CFO, including the ability to report results on both consumption and commitment basis, distribution of support and management activities, and separation of certain costs such as rent and board expenses.

Furthermore, the effects of COVID-19, especially regarding temporary work distribution (MAF), were taken into account, and the costs thereof were included in the analysis.

Lars Simmelsgaard, CFO at KRIFA, states: "The results of the analysis have helped us in the strategic process to understand the relationship between member behavior and our costs.

Transparency in the settlement of IT services to business units.

The purpose was to create transparency in the settlement of IT services to EnergiNet's business units. The starting point was the company's TCO model (Total Cost Of Ownership), which was to be supported and further developed with a value chain analysis and the thinking from ABC (Activity Based Costing). A model of the value chain was developed to support Technology Business Management (TBM).

Route accounting for follow-up and settlement of services between partners:

CES ApS began a project in collaboration with RAL in 2020. The purpose was to ensure the basis for a future ABC account, initially a route account. The work resulted in a roadmap for collecting the necessary data for the route account. CES and RAL jointly prepared a route account for 2020, based on the ABC approach and implemented in the Prodacapo tool.

CES currently has 2 project hires at RAL: a business controller and an RPA specialist.

The idea of involving CES in ESG reporting came from a conversation with RAL's CFO, Jørgen Aqe Møller. He suggested whether the ABC model could be used to distribute indirect CO2 emissions in scope 2 and 3.

This ignited the spark for CES's new focus!

Activity based costing in an insurance company

CES had entered into an agreement with Friforsikring for the project employment of one of our consultants. The task was to prepare an activity analysis and then a value chain analysis based on the ABC approach. This was to analyze the costs of individual services and for selected member categories.

The project has given FriForsikring a deeper insight into the business, as the project employment allowed us to get very close to daily operations.

It was a great pleasure to work closely with the team at Friforsikring, and we look forward to collaborating with them to gain new understanding and insight into the business.

DanPilot A/S

CES, in close collaboration with DanPilot, first developed a Prototype and then a detailed ABC Model, subsequently building the foundation to update the ABC model monthly.

See the detailed ”Case DanPilot”

Going forward, the focus is on automatic integration and forecasting of results with the ABC model.

Lars Teil Johansen, Head of Business Support states:

"Issues: Lack of insight into profitability at all levels (products, customers, ship sizes, etc.) Implementing Prodacapo has significantly raised the level of insight into the business. Previously, DanPilot had an assumption about which products and customers made money. However, this assumption varied depending on who was asked in the company. After DanPilot implemented a full ABC distribution model, we got a clear overview of the actual earnings at a very detailed level. We can now go down to individual product groups, customers, ship types, ship sizes, etc., and see profitability. This has significantly increased knowledge of our business, and we can now see where changes and adjustments need to be made to increase earnings. The ABC model is now an integral part of DanPilot's decision-making basis when analyses are to be made regarding pricing, cost savings, efficiencies, etc.

DanPilot can fully recommend other companies to implement Prodacapo to increase the transparency of the business."

MicroShade A/S

Budget/estimate for result and cash flow:

CES ApS has collaborated with MicroShade for many years on the maintenance and development of a tool for budgeting/estimating. The tool allows for continuous prediction of the result and the cash flow effect of the company's action plans and market development.

It is incredibly exciting to follow the development in an innovation company on the journey towards the technology maturing and achieving its full potential.

LMO I/S (today VELAS)

At LMO, CES worked with the sales department, where tasks included:

Customer segmentation, linking internal data on customers with external data, and developing various lists to target sales efforts.

Development of a sales reporting package in collaboration with the sales manager. Sales reporting reported the number of new customers and sales in relation to LMO, but also cross-selling between the different departments on existing customers.

The focused effort on the sales side resulted in a larger influx of new customers than expected, and the turnover generated as a result of customer growth was greater than anticipated. Moreover, significant progress could be measured in cross-selling to existing customers.

Improvement and development of an inventory provision model

CES ApS, in collaboration with Kongskilde Industries, developed an inventory provision model to replace the previously used model. The model is based on SQL data extraction from the company's IFS ERP system and can be updated in less than 30 minutes. The final output is presented in pivot tables with the possibility of follow-up and tracing down to the lowest level. The calculations are based on a weighted average at the product level with data concerning production and sales over a 10-year period. The model is also parameter-driven, allowing for varying depreciation profiles for different product categories. The model was put into operation and ran parallel to the old model until it could be phased out. The model has now been running with few adjustments for more than 3 years.

It has been a pleasure to work with Kongskilde Industries' team of dedicated and competent employees. Especially the collaboration around the development of SQL extraction and data reconciliation has been uplifting, as this is often where problems arise.

Tool to support Asset Management and The Seven Strategies

CES, in collaboration with Skanderborg Forsyning, developed an ABC model that supports Asset Management.

In this context, the method 'the 7 strategies' was developed. It is a method that focuses on prioritizing the Asset Management effort from three perspectives: the extent of the investment, the costs associated with operating the facility, and the risk associated with the facility not functioning. All of this is considered based on an 80/20 prioritization.