Applying the activity-based costing (ABC) model in a consulting company: an improvement of the model

Abstract

In unstable and constant changing environments, as it is the current organizational world, it is notable the real need felt by companies on trying to overcome their competitors, in both employed strategy and auxiliary tools. In this way, there is an increase in the available tools in the market, which aim to help companies in their decision-making process and in the achievement of higher efficiency in the running of all their internal processes. Due to this, the necessity on being constantly innovating these tools outstands significantly in companies, in order to these to be always one step in front of their competitors. From this necessity arises the subject of this article, as it pretends to adapt an existing tool – the costing model “ActivityBased Costing” – to a management consulting company, named Winning Management Consulting. This application aims to prove the adaptability of this model to the Consulting sector, as there are so many benefits that a company may achieve from its application, namely in the assistance to the decision-making process and to the cost management. In parallel, the project will also contemplate a secondary analysis (a complement to the ABC model), which will allow the company to act not only upon the main processes (that were analyzed in the ABC), but also upon all the secondary processes, without which would not be possible the correct running of the business. In conclusion, this analysis aims to positively contribute to the model’s improvement.