Standardizing cost centers for a government organization
For one large government organization, business units across the enterprise were permitted to operate independently and establish their own individual standards. This autonomy led to inconsistency, dissimilar cost center structures, and highly variable business practices. With the help of WP&C, the organization was able to form a consensus for standard ways of working across the enterprise which allowed for increased consistency and improved performance for all business units.
As a result of the autonomy granted to each business unit, the headquarters lost its ability to fully manage processes across the organization. As budgets tightened, the headquarters realized that the dissimilar cost center structures prevented proper cost comparisons across business units which impeded leadership’s ability to identify best practices and led to inconsistent financial metrics. WP&C worked with the headquarters to gain control of these processes. This was accomplished by aligning the business units to the same cost center structure with clear categorization of the activities that belong within each cost center.
Working with the finance leads of each business unit along with members of the leadership team, WP&C established the new cost center structure:
As a result of the workshop findings, WP&C partnered with the client to develop a comprehensive plan that would limit financial and organizational disruption to the business units while still moving forward with implementation:
WP&C gained alignment from all stakeholders on the new cost center design to include the headquarters and business units. Armed with an executable and sustainable implementation plan, in less than six months the new structure reduced the number of active cost centers for business units from hundreds down to only a few
The standardized cost center structure provided the foundation needed to capture additional benefits within financial processes. In particular, with the new cost center structure in place, budget generation and labor rate calculations were quickly identified as follow-on initiatives that would be standardized for additional gains.
As a result of the autonomy granted to each business unit, the headquarters lost its ability to fully manage processes across the organization. As budgets tightened, the headquarters realized that the dissimilar cost center structures prevented proper cost comparisons across business units which impeded leadership’s ability to identify best practices and led to inconsistent financial metrics. WP&C worked with the headquarters to gain control of these processes. This was accomplished by aligning the business units to the same cost center structure with clear categorization of the activities that belong within each cost center.
Working with the finance leads of each business unit along with members of the leadership team, WP&C established the new cost center structure:
As a result of the workshop findings, WP&C partnered with the client to develop a comprehensive plan that would limit financial and organizational disruption to the business units while still moving forward with implementation:
WP&C gained alignment from all stakeholders on the new cost center design to include the headquarters and business units. Armed with an executable and sustainable implementation plan, in less than six months the new structure reduced the number of active cost centers for business units from hundreds down to only a few
The standardized cost center structure provided the foundation needed to capture additional benefits within financial processes. In particular, with the new cost center structure in place, budget generation and labor rate calculations were quickly identified as follow-on initiatives that would be standardized for additional gains.