This discussion forum supports the "Show Me the Money" AgilePhilly presentation of April 17, 2018 during which the attendees were introduced to Accepted Value Costing, or AVC. This is a Lean-Agile extension of two-stage activity based costing developed by Dave Hughes starting in 2015.
Online materials will increase dramatically after the official presentation at Agile and Beyond 2018 in Ypsilanti, MI. A formal white paper and at least one blog are planned for publication in the May-June 2018 time frame. Prior to that, the annotated bibliography is available at http://trainingdhughes.comcastbiz.net/; click the "Accepted Value Costing" link on the left.
The Accepted Value Costing workshop at Agile & Beyond 2018 was a success! The presentation, drill, and reference material all have been revised as a result of that experience and uploaded here for my Agile Philly colleagues. Additional information - and a full Web site, eventually - is available at http://trainingdhughes.comcastbiz.net/. A slack workspace dedicated to Accepted Value Costing and available to subscribers is at https://avc-acceptedvaluecost.slack.com/.
To request access to the slack workspace, send email to AcceptedValueCosting@gmail.com.
Public files are in PDF.
Introducing Accepted Value Costing (AVC).
Cost accounting structures are complex, deeply entrenched based on long years of hard experience, and effective in satisfying executive decision makers. Ironically, they are very costly, as well. Project-based costing continues as the management accounting approach of choice within Agile transformations, even after two decades of proven success with Lean and Agile alternatives. In addition to the costly overhead, project-based costing contributes to delivery unevenness leading to waste mostly in the form of multitasking. It contributes to a mindset of anti-patterns resulting in overburdening of the people involved.
There is an easier way. Accepted Value Costing is a field-tested approach based on activity-based costing techniques adapted to the Lean-Agile paradigm of fixed cost + fixed time + variable scope value stream delivery on a cadence. It overcomes the valid reasons for resistance by financial and accounting departments to change in favor of pure activity-based costing, Beyond Budgeting, and Lean accounting. It is a field-tested integration approach which favors enabling Lean-Agile decision making over the mechanics of budgeting, time reporting, and variance tracking.
AVC is a permission-giver. It is lightweight, effective, and focused on practical decision making favoring delivering value early and often.
LinkedIn #AVC #AcceptedValueCosting "Accepted Value Costing Explained" published 7/15/2018. A version with graphics is posted for AgilePhilly.