DanPilot's ABC project
“The implementation of Prodacapo has lifted the insight level in the business considerably”
Lars Teil Johansen
Head of Business Support, DanPilot
Model that reflects the reality
"We have built a model that reflects the reality of DanPilot, the economic relations and realities. This resulted in many AHA! moments, where we dug considerably deeper into the complexities of DanPilot, and we have consistently followed up on all the "strange" results and data through to completion."
Simon Madsen, Business Controller (Project Manager)
Simon Madsen further says, "The process is time consuming and extensive, but once the knowledge is there, you can’t do without an ABC model."
This way of ABC thinking is new at DanPilot, and it takes time to integrate it into all the levels of the organization. The process in which a model is first built and then gradually expanded, from involving a few people to involving the entire organization, has proven useful at DanPilot.
The model has survived despite numerous changes in the project group, and has proven to be a resilient foundation when making strategy decisions.
The increased awareness and insight into DanPilot as an organization has raised both new questions, and given answers to previously unanswered ones.
This opportunity for new insight has piqued the interest of the Functional Specialists, who in turn have been forbearing with the project. The dialogue between the project team and the Functional Specialists has been paramount to the model, and the project.
Focus on data quality
In this project, 80% of the time consumed was related to the data foundation, that is, the mining of data, error correction registrations and estimations of missing records and the preparation of requirements for future data mining, correction of errors in setup, etc. Thus, the project has helped highlight the importance of data quality. Everyone in the organization benefits from the improved data quality and saves time by not having to deal with incorrect reports and poor decision support. ABC operates in this respect as a requirements specification for the database.
Mining accurate data is a gradual process, which means having accurate data when building the first model is not a requirement. Understanding the data leads to insight and highlights the faults in the data which can then be corrected. This leads to a more pro-active way of creating a LEAN data mining process, where time is not spent on mining unnecessary data, but spent on mining relevant data.
ABC with traceability
The ABC model shows the value chain costs graphically for each process, and calculates how much they cost and how many full-time employees are included. Prodacapo provides a quick overview, while one can trace back the calculations to their roots. It is therefore possible to both check the calculations, and evaluate the assumptions. Traceability in the model makes it suitable for the documentation of cost-based prices. Simon Madsen, Business Controller, further says:
"With the models calculations as a foundation, a lot of hypotheses and assumptions were disproved. Previously, allocations were based on an overall average, where ABC models are based on allocations via activities. This reflects the actual resource consumption and thereby the actual costs of the service provided, customer and/or route."
"A strong feature is the trace-back ability in Prodacapo, which helps clarify incomprehensible figures and calculations, as you can trace back all the way to the G/L numbers, a powerful tool, regardless of whether you click on a customer, a route, an activity etc."
This project has been implemented as an administrator and super-user project, where one of the objectives is to assure that DanPilot is able to maintain and develop their ABC models. DanPilot has recently decided to update the ABC models monthly, ensuring live models where changes in the structure and setup are continuously incorporated, just as knowledge of ABC becomes an integrated part of everyday life.
Prodacapo serves as a multifunctional tool supporting DanPilot’s need to continuously adapt the models. Once the models have found their final forms, it is possible to automatically update them via the Connect module.
Head of Business Support, Lars Teil Johansen, says, "My main issue was: Lack of insight into profitability at all levels (product, customer, vessel sizes, etc.).”
Now an integrated part
The implementation of Prodacapo has lifted the insight level in the business considerably. After DanPilot had implemented a full ABC allocation model, the company got a clear view of its business on a much more detailed level. DanPilot can now mine data at a significantly deeper level. This has lifted the overview of the business considerably, making it possible to make changes and adjustments to the business. The ABC model is now an integrated part of DanPilot’s decision support whenever making analyses about cost savings, efficiency etc.
DanPilot can fully recommend other companies to implement Prodacapo to increase the transparency of their businesses.
What our customers say
"Implementing Prodacapo was a strategic decision we made to respond to the new market conditions for the healthcare sector in the Netherlands."
"At the early phase of the project, some of the departments were quite hesitant in participating, but as soon as we were able to present the first results of our project the doubtfulness was replaced by enthusiasm."
Niek Bossché & Paul Steinbush
Erasmus Medical Centre, The Netherlands
"Prodacapo provides us with great information and more precise patient costing data."
"It's also very important for us to compare and analyze on different levels and in between different departments. Prodacapo gives us better management information of for example resource consumption per patient treatment."
Reidun Martine Rømo
Ekonomichef, Helse Midt-Norge
”Using Prodacapo's TDABC methodology (Time Driven ABC) means we have got a an easy-to-use costing tool, a costing model that is easy to understand and a unified method to track the patient level costs.”
Head of patient level costing, County council of Jämtland, Sweden