Driver Based Analysis for management accountants

1. Driver Based Analysis
A real problem with a real solution for
intelligent decision-making

2. You might think your profit margins look like
this
• But really, they probably look like this.

3. Do you really understand product
profitability?
• Most organizations assign overhead across multiple products using
broad estimates to allocate indirect costs to products.

4. Overhead allocations seem complex, so the cost is
allocated to products based on intuition

5. However, overhead is driven by individual
activities

6. And different products consume resources at
different rates based on the economics behind
them

7. By studying the processes and collaborating,
organizations can determine true overhead cause-
and-effect relationships

8. You’ll be surprised at how different reality is
from guesswork

9. Generally, a few winning products carry the losers.
Do you know which is which in your organization?

10. “If it’s such a great idea, which isn’t more
popular?”
• The world wasn’t read for Driver Based Analysis in the ’90’s- early
2000’s.
Technology wasn’t developed enough
Internal resistance and a lack of knowledge created barrier
Expensive and messy ERP system adoptions soured interest in additional
projects
• Today, we are ready:
Powerful supporting technologies; cloud focused, adaptable, flexible
35 years of domain knowledge and expertise established
ABC is taught in all management accounting classes and certifications (CMA)
A variety of powerful and effective niche ABC systems are in the market as
well as many customized solutions

11. Driver Based Analysis Will Also Increase Revenues
and Make Compliance Reporting (ESG) Much
More Manageable

12. Are you running your business or are
outdated systems and methodologies?
The Activity Based Costing (ABC) Paradox- An Incredible
Puzzle
Visit BenjaminWann.com to learn more!