Reducing Risk by Modelling Military Capability

Be less at risk of unfunded liability and more able to plan effectively for changes in policy and operational necessity

When the built-up (and through-life) cost of delivering a given outcome is not known, then how can an enterprise understand the consequences of cuts to their budgets (on those outcomes)? Equally, what if the required outcomes are changed, due to necessity or changes in policy?

Why is it important for private-sector enterprises to clearly understand the relationship between overheads and delivery functions? There are obviously many reasons but there are two particular drivers:
  1. Having a clear model of the relationships allows them to calculate the profitability of delivery units and the products they may make and sell, for example;
  2. It also allows profit-making businesses to offset the expenditure on overheads against their tax-liability, allowing them to pay less tax.
Any business which does not have a clear model of their overheads and how they can be aligned to delivery and profit is in significant need of one. What about enterprises that do not pay corporation tax or do not generate revenue, meaning that there can be no need to consider profit? Would they have invested the time and effort required to understand these complex relationships? Understandably, probably they would not; but there is a very good reason they ought to.

Parity has extensive experience in understanding and modelling the built-up costs of both private and public sector organisations, and their relationships to outcomes.

The Parity Capability Costing method allows us to build you a deterministic model of your enterprise, which you can use to understand your organisation and model the effects of possible or real changes.
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