RCA Open Source Application: ROSA Manual/Demonstration of the Base Model/Step 1/Analyze Resource Pools

Step 1: Discover RCA - Analyze Resource Pools & Business Processes


The Analyze Resource Pools and Business Processes report displays the result of the planning that was done. Recall that the elements of this report were discussed in Unit 3 on page 13 and will be repeated here for ease of reference.

In Figure 23 - Analyze Resource Pools and Business Process report shows how the costs are incurred on a cost object and reflects Primary and Secondary costs by element in the rows. Primary elements reflect the GL account number and Secondary elements reflect the resource pool or business process where the secondary costs are coming from. The first three numeric columns in Figure 23 show the Dollar values (Total, Fixed and Proportional).

The last three columns in Figure 23 show the quantities consumed, as Total Quantity, Fixed and Proportional Quantities. Note that quantities are only shown against secondary cost elements. In this same report, it also shows how costs are recovered or charged out to the consumers for the cost object’s services. Note, in this example costs are recovered to resource pools, business processes and to products.

The very bottom row, titled “Over / Under Recovery” shows the difference, or the net result, of cost and recovery. As this model only deals with “planning” (budgeting), you should not have an Over Recovery. If there is excess capacity in the resource pool, you should see an Under Recovery here.

Managers can use this report to:

a) Compare Actual expenses against Planned cost, only if “Actual” expenses are available. As this model only deals with “Planned” information, actual columns are not displayed. Direct expenses influencing the Income Statement are represented under Primary cost. For example, if it is noticed that actual “Salaries” exceeds the planned value, the question can be asked: “Did we employ more personnel than planned or is it just a wrong assignment?” Under Secondary cost, the manager could also question any actual services received from another department. b) Managing Resource Pool rates effectively. When operating in a competitive environment, it becomes the utmost importance to charge the consumer of your services correctly. This report is the starting point when reviewing rates and more particularly the split between the fixed and proportional components of the rate. The dollar breakdown on this report between fixed and proportional provides a feel as to the nature of costs and indicates what cost elements make up the different rate elements. c) Manage Recovery and Excess/Idle Capacity. The recovery portion of this report summarizes the provision or the dispersion of resources. The Over/Under Recovery line provides an indication of the excess capacity’s value. Note that the quantity figures on this line are meaningless as resources with different units of measure are summed together.