Be less at risk of unfunded liability and more able to plan effectively for changes in policy and operational necessity
Understanding the consequence of changes to policy and spending can help avoid costly errors.
Most organisations track direct costs, but few have comprehensive models of how their spending is linked to business outcomes. This makes it hard to understand the consequences of increased spending, budget cuts or policy changes, and so undermines effective business decision-making.
It is important for public and private-sector organisations to clearly understand the relationship between costs and delivery, even when there is not a direct link, for two major reasons:
- Having a clear model of the relationships allows them to calculate the profitability of delivery units and the products they make and sell;
- It allows profit-making businesses to offset expenditure on overheads, allowing them to reduce tax expenditure.
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, which we have delivered for organisations including the MOD, allows us to build a deterministic model of your enterprise, helping you understand and model the consequences of possible or real changes.