Professional Documents
Culture Documents
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Accepted Value Costing
§ Field tested
üTwo years
üTwo large organizations
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Accepted Value Costing
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Knowledge Work Cost Lens
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The Need
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Traditional Cost Management Systems
§ Coherent
§ Focused on controlling costs at the most detailed level possible
§ Therefore controls performance behavior, as intended
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AVC Approach
Tools and Techniques, Results
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Proportional Cost Allocation
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Proportional Cost Allocation
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Practical Decision Making
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Tools and Techniques
§ Lean-Agile Method
ü Kanban
– Service class m odel and/or feature decom position
ü Scrum
– Portfolio hierarchy: initiative > feature > story
§ Decision Making
ü Value vs. cost quadrant model
ü Ordered histogram
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Feature, Class of Service Feedback Loop
§ Rank Value
§ Proportionately Allocate Accepted Work Item Costs
§ Decide
Cost
Value
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Release Proportional Cost Allocation By Feature
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
89 18 9 95 16 70 17 69 100 8 54 72 3 36 94 71
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Direct Indirect Indirect
Material Direct Labor Labor Labor
Resource Unallocated
Resource Resource A Resource Z
%
%
Stage 1 Cost %
%
Drivers
Activity Activity
Cost Cost
Pool 1 Pool 2
Stage 2 Cost
Drivers
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Scrum Kanban
Team A Team B
%
%
%
%
Feature Service
1 Class 2
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Kanban Kanban Scrum Kanban Kanban
Team P Team Q Team A Team B Team Z
Service
Feature Feature Feature Service Class
16 8 1 Class 2
32
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$300 $150 $140 $160 $85
Kanban Kanban Scrum Kanban Scrum
Team P Team Q Team A Team B Team Z
Service
Feature Feature Feature Service Class
16 8 1 Class 2
32
Initiative / Epic
$835
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$300
Kanban
Team P
20% 50%
30%
Feature Feature Feature
16 8 1
Initiative / Epic
Initiative / Epic
$835
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David Hughes, KCP
david19341@gmail.com
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Copyright © 2018 by D. Hughes & Co.