Showing papers on "Overhead (business) published in 2005"

Purchasing process transformation: restructuring for small purchases

Abstract: Purpose – Reducing purchasing costs remains an ongoing concern for most organizations. The standard purchasing process that works well for large purchases, however, generates proportionately much higher overhead and administrative costs for small purchases leading to purchase delays, high error rate, and poor vendor participation. There is a need to develop separate purchasing processes for small and large purchases and evaluate underlying factors that affect such process transformation. This paper aims to analyze a successful purchasing process transformation conducted at a utility company for small purchases.Design/methodology/approach – It uses a case study methodology to examine the transformation in detail and understand related issues such as benefits realization, resistance to change, and risk management involved in such transformation projects.Findings – It compares original and transformed purchasing processes and identifies resultant benefits to the company, participating vendors, banks, and emp...

Project management software

Abstract: A method for managing fees and profitability is provided by calculating the number of hours that employees should be assigned to a specific project and stay within the available fees. The method derives the direct labor from fees, profitability, direct expenses, and overhead. The direct labor is then used to determine staff hours that can be spent on a project within the available fees for the project. The process also assigns hours per day for individual staff members to work on a project. The program reschedules labor when there is a change in any of the variables that comprise project fees. The program also evaluates working days available for each staff member, and considers holidays and individual leaves or vacation.

The Antioch Company brings lean into the office

Abstract: Kaizen Blitzes, intense multiday events that shine a light on waste in processes, have netted companies significant savings in manufacturing and other operations functions But waste still lurks in the dark corners of administrative, support, and other office processes, buried in the accounting dumping ground called overhead At The Antioch Company, grass-roots actions have evolved into a pragmatic lean office program, with benefits from lean events extending well beyond the expected savings in process time and cost © 2005 Wiley Periodicals, Inc

Outsourcing, Offshoring, Nearshoring: What to Do? Whether You Outsource Locally or Globally, You're Still Responsible for Client Privacy

Abstract: EXECUTIVE SUMMARY * FANS OF OFFSHORE OUTSOURCING SAY it lowers labor costs; it's efficient; and it lets firms accept new work during periods of peak demand. * SOME LONG-TERM CONCERNS CPAs VOICE ARE: How will outsourcing affect the traditional CPA career path? How will it affect U.S. employees' training? How will accountants who do not perform the tasks associated with entry-level competencies develop true understanding of the services they provide? * FIRMS MUST DISCLOSE THEIR USE of third-party vendors to clients whether the outsource provider is located within U.S. borders or in a foreign country. * PROPONENTS SAY THE PROCESS IS MORE efficient, though firms lose the efficiency that develops when the same in-house staff members service a client from year to year. * OUTSOURCERS OFTEN USE FIREWALLS that are more secure than those used by many U.S. firms. But focus-group participants said they were uneasy about having their personal information sent 7,000 miles away. * BEFORE CONTRACTING WITH A PROVIDER, ask how it screens and monitors employees, how a system breach will be handled, where disputes will be resolved and what the firm's liability insurance covers. If there's a problem, liability will rest with the U.S. firm. ********** New ideas and services can change a business culture with astonishing speed. A generation ago few CPA firms offered business valuation, litigation support or retirement planning, yet those services are mainstream today. Equally common are formerly cutting-edge ideas such as flextime, cross-selling and firm consolidation. Now, as technology makes it easy to move data great distances, another innovation has its foot in the door. It's tax-preparation and financial-services outsourcing--called offshoring when the work is done overseas and nearshoring if it's done in Canada or Mexico. This article describes some pros and cons of business process outsourcing (BPO)--with the emphasis on work done out of the country-and suggests how interested firms of all sizes can research whether it's right for them. WHAT IS TAX OUTSOURCING? The tax-preparation outsourcing process is simple. A CPA firm staff member scans client documents, including W-2s, 1099s and K-1s, into a .pdffile saved in the network, then sends along the prior-year tax file to the outsource provider. The provider, in or outside the United States, then uploads all scanned documents and relevant tax files to a U.S. data center. Outsource workers access the documents via a Web browser, organize them into a Web-based file and prepare the returns. If the provider happens to be in India, chartered accountants using the U.S. firm's preferred tax software follow the same procedures and prepare the returns. Then the firm "picks up" the returns electronically and reviews and corrects them as needed. WHAT ARE THE GOOD POINTS? Proponents of tax outsourcing cite these virtues: It's efficient. Outsourcing provides seasonal labor without the overhead of permanent hires, which is particularly helpful to firms dealing with a staff shortage. Firms with enough people to handle busy season but that worry about a glut of unused hours the rest of the year may see a benefit, too. Indian providers, who are at work while U.S. workers are sleeping, may offer two- to three-day turnarounds during "crunch" time, quicker than most firms can deliver internally. Fred Shapss, CPA, partner at Rosen, Seymour, Shapss, Martin (RSSM) & Co., New York, says his firm has found tax offshoring helps relieve busy season overload. The firm outsourced about 150 of its 2003 individual returns to India and upped that number to about 600 returns (out of about 4,000) for 2004. It's a straightforward operation with "no complexities" he says. "We get a 48-hour turnaround. But--like anything else--you have to monitor and manage the process." It lets firms handle more work. …

Intelligent aggregation of purchase orders in e-procurement

Abstract: A large enterprise generates millions of purchase orders (PO) each year buying various types of goods and services. Each PO has a cost associated with it. This cost comprises multiple elements including the price of the good or service, the shipping and handling of the purchase, and the overhead in initiating, generating, tracking, and managing the PO. To reduce the cost of doing business, it is imperative to reduce the total cost of POs in enterprise e-procurement in an automated fashion. One way to reduce enterprise procurement cost is to aggregate demands so that the total cost of a bunch of POs is reduced by a better price, a lowered shipping and handling fee, and a reduced overhead. The cost of goods and services often depend on several factors including volume, timing, and other business objectives. This paper describes an intelligent aggregation approach for automatically aggregating demands to reduce procurement cost in enterprise e-procurement. Our aggregation approach for e-procurement consists of an information model for representing products (goods or services) and representing purchase orders for such products, a corporate agreement system, a negotiation engine, and a rule-based aggregation engine. The information model is based on an extension of the classic entity-relationship model. The extension enables association of rules and constraints with and among attributes. These rules and constraints must be satisfied during PO aggregation and thus ensure the aggregate PO to be consistent with original individual POs. A rule-based aggregation engine examines POs as they arrive and interact with other decision aids to determine whether aggregation of a particular bunch of POs makes any business sense. Aggregation can happen in two business scenarios, one for POs constrained by existing corporate agreements and another for POs to be refined by online negotiations. The aggregation engine interacts with a corporate agreement system to obtain supplier policies in the first scenario. For the second scenario, it interacts with the negotiation engine to obtain supplier's policies during iterations of the negotiation process. Relevant policies are those that define product pricing, shipping and handing, and post-sale sendees as well as warranties and returns. Examples are given to demonstrate how automated intelligent aggregation of purchases is performed and how it reduces cost in enterprise e-procurement.

Proactive management of service instance pools for meeting service level agreements

Abstract: Existing Grid schedulers focus on allocating resources to jobs as per the resource requirements expressed by end-users. This demands detailed knowledge of application behavior for different resource configurations on the part of end-users. Additionally, this model incurs significant delay in terms of the provisioning overhead for each request. In contrast, for interactive workloads, services are commonly pre-configured by an application server according to long-term steady-state requirements. In this paper, we propose a framework for bridging the gap between these two extremes. We target application services beyond simple interactive workloads, such as a parallel numeric application. In our approach, end users are shielded from lower-level resource configuration details and deal only with service metrics like average response time, expressed as SLAs. These SLAs are then translated into concrete resource allocation decisions. Since demand for a service fluctuates over time, static pre-configurations may not maximize utility of the common pool of resources. Our approach involves dynamic re-provisioning to achieve maximum utility, while accounting for overheads incurred during re-provisioning. We find that it is not always beneficial to re-provision resources according to perceived benefits and propose a model for calculating the optimal amount of re-provisioning for a particular scenario.

A data-driven approach for embedded security

Abstract: As embedded systems are being used in a wide variety of critical applications, providing security to data stored and processed in these systems has become an important issue. However, providing security incurs performance and power overheads that need to be limited in resource-constrained embedded environments. Consequently, architectural support to limit these overheads to be incurred only while storing or processing vital data is desirable. In this paper, we present an architecture that provides selective encryption protection for storage and processing protection to power analysis attacks for data marked as requiring security. Further, we show how the code can be transformed to reduce the overhead associated with protecting secure data.

A dynamic model for profitability analysis of construction firms: towards complexity, learning, and uncertainty

Abstract: The construction industry has changed significantly over the last two decades due to the effects of globalization, delivery system innovations, increased competition, and the application of information technology. Industry professionals know that to compete in these times they need to manage their performance more efficiently and fine-tune their business strategies to maintain and improve profitability and increase the company value. However, traditional theory and understanding of profitability management are not flexible and powerful enough to lead construction firms to a higher performance in the rapidly changing market. It has been a widespread and serious problem in the construction industry that profitability appears low, unreliable, and unmanageable. As a pioneer attempt in the exploration of a new theory of profitability management for construction firms, this study identifies the elements of the profitability as: quality, potentiality, and sustainability of profits. The study presents that these three elements are interactive and integrated into a profitability system which is dynamic, adaptive, and process based. And moreover, this study develops a model for analyzing the profitability of construction firms using system dynamics. The model is illustrated for the bidding practice in a typical medium-size general contractor. The study identifies the path dependency occurring in the construction practice. A small change of external variable could amplify and cause significant change in the business performance. Learning as an important strategy for the organizational unit was studied and simulated. The study found out that learning is effective and helps to improve the performance when the uncertainties are reduced. As another aspect of the profitability system, company overhead is affected by the cash flow management. Overdraft, discount for timely payment, and under/overbilling constitute the most important issues regarding project cash flow management. Construction firms have to balance the material savings and overdraft in an attempt to reduce costs. Based on a case study on a warehouse project, the study finds out that payment policy can be optimized within the framework of the profitability system by integrating overdraft, material credit, and overbilling. The overdraft requirement, material discounts terms, and the overbilling strategy are analyzed and discussed in single and multiple projects environment.

Considerations about the maintenance in electrical networks

Abstract: The technological development experienced by industrialized countries has brought about a huge increase of demand of electric power. As a result, the utilities in charge of electric power transmission and distribution have noticed that the overhead lines are reaching critical values in different parameters, for this reason the maintenance is very important. In order to tackle this issue, we have undertaken a proposal for the good selection of the system maintenance in electrical networks. It carried out a comparative analysis, among the systems for corrective, preventive maintenance and predictive, being determined the rational areas use of each one of them, in function of the fault level of the network, using as function object the Net Present Value. Actually the results of this work are used in different enterprises as a methodology.

Designing a domestic water supply system—The engineer’s perspective and considerations as a challenge to consumers

Abstract: Water is an essential pre-requisite for survival and development. It supports life of all forms including job and wealth creation in water sector, tourism, recreation and fisheries. It is extracted from rivers, lakes, processed and delivered to households. When population increases, the demand, water use and consumption increases and this puts pressure on the water utilities. This can create scarcity as not all areas may be met by the supply. One possible solution to this problem is to expand the capacity of the utility but the most tangible solution is the installation of borehole and an adequate water supply system that can meet minimal installation and operating costs. A water supply system that uses borehole and tank system can become insufficient in water supply when the population increases. This may require redesigning the system so that it can meet the new demand for water. The design developed for grouped residential with a population of 91 people living in 17 flats was found to accommodate an overhead load tank of 5.7 m 3 at 13.5 m level, a submersible pump with a power rating of 1.2 kW and two centrifugal pumps with the same power rating. The increasing capital, fixed, operating costs was a challenge to the consumer as most of them were not able to install such systems in their households. The paper concludes with a summary of recommendations that the consumers could exploit in order to face the challenges of water provision in their households.

Comparison of incentive-based cooperation strategies for hybrid networks

Abstract: Today’s public Wireless LANs are restricted to hotspots. With the current technology, providers can only target a small audience and in turn charge high prices for their service to generate revenue. Also, providers can not react appropriate to dynamic changes of the demand. With multi-hop cellular networks the coverage area can be increased and the installation costs and investment risks for the provider can be reduced. However, the individual customers play an important role in such networks and their participation must be encouraged. Therefore, we propose a cooperation and accounting scheme which introduces monetary rewards. We compare our scheme called CASHnet with the Nuglet scheme using simulations under the criteria of network liveliness as well as goodput, overhead and packet error rate.

The Dollars and Cents of Green Construction: Being Environmentally Friendly Brings Financial as Well as Social Benefits

Abstract: EXECUTIVE SUMMARY * WHEN PLANNING CONSTRUCTION PROJECTS, consider the tax implications, rebate offers and soft benefits associated with environmentally friendly construction. Construction companies may not be eligible for these on buildings they construct for others, but building owners and any subcontractors used on the projects are. * IT'S MOST COST-EFFECTIVE TO CONSIDER green elements before beginning construction, but some elements such as solar panels can be added to existing buildings. * FIRMS AND COMPANIES CAN BE environmentally friendly and also save or earn money in seven ways: Tax rebates; LEED incentives; recycling the core and shell of existing buildings; using energy-efficient devices; maximizing natural energy sources; building on HAZMAT and Superfund sites; and calculating the intangible benefits of green construction. * WHILE CPAs MAY FIND IT DIFFICULT to quantify the soft benefits, studies show that environmentally friendly buildings raise employee retention and productivity rates, improve the retail customer experience and generate higher average revenues, and bring apartment building owners higher-wealth clients willing to pay more in rent. My company has gone green--and as its controller, I've helped its management and customers recognize that the tax benefits, rebates and lower utility costs of being environmentally friendly add up to a real bottom-line reward for doing the right thing. We've used many "green" elements in building three Stop & Shop supermarkets, and come to understand that green construction can be a smart business decision as well as a socially conscious one. In addition to the hard cost savings, studies show that natural light and fresh air improve employee productivity and retention, allow apartment-building owners to charge higher rents, and increase retail revenues by encouraging customers to stay in stores longer and spend more. In this article I'll share what I've learned to help my fellow CPAs suggest incorporating green concepts when their firms undertake construction projects or clients plan to build commercial or residential properties. This year is a particularly good time for small and midsize firms and companies to consider construction projects, to take advantage of a two-year extension and upgrade to the U.S. Small Business Administration's 504 loan program. Loans can be used for the purchase of equipment, construction, renovation or acquisition of land by small businesses, and carry low fixed interest rates. For 2005 and 2006, the maximum for loans to general businesses has been raised to $1.5 million; minority- and women-owned businesses can borrow up to $2 million and manufacturers can borrow up to $4 million. GOING GREEN FOR STOP & SHOP Like many good ideas, the environmental approach we took actually was suggested by our client; Stop & Shop management already had the design in mind when it hired us to manage its construction project. Its vision was to earn tax incentives and rebates--as well as to improve the customer experience and maximize sales--by recycling the concrete from the demolition portion of the construction project and using high-efficiency heating, ventilation and air-conditioning (HVAC), energy management and hot water reclamation. That translated into lots of skylights that allowed natural light into the stores, and a system that automatically dims or brightens the overhead fixtures depending on the amount of sunlight. Stop & Shop also installed a hot water reclamation system that draws off the heat being generated by the refrigeration units in the stores and uses it to preheat the water that runs into the hot water heaters. Our interest in green construction began long before Stop & Shop hired us, though. If it's done right, green construction doesn't add cost, and its long-term return on investment (ROI) is real. It increases the value of the building and reduces operating costs every year. …

Making Health Savings Accounts Work

Abstract: Newly created health savings accounts (HSAs) promise to solve problems extant across the corporate benefit landscape—namely, rising health care costs. Frustrated employees abet this situation by overusing the health care system, justified by the conclusion that once they pay their premiums, they should use the services. Through reduced premiums and lower administrative overhead, HSAs can save employers from 10% to 30% on health care costs while expanding the range and quality of health care choices. However, successful implementation of HSAs requires a number of essential elements: thorough, easy-to-understand and readily accessible patient education; cost-conscious treatment recommendations that fit within medically approved algorithms; simple, yet seamless integration of banking functions into medial insurance claim processing; and the technology to make it all work. The ability of HSAs to attenuate rising health care costs rests not only on their inherent tax advantages but also on the optimized implem...

Economic Implications of Selection of Long-Life versus Conventional Caltrans Rehabilitation Strategies for High-Volume Highways

Abstract: This report presents the results of a two-part study that compared the lifecycle costs of two long-life pavement (LLP) rehabilitation options and several conventional rehabilitation strategies for existing asphalt and concrete pavements, considering both agency costs and road user cost associated with traffic delay caused by construction. In the first part of the research, data from a 1996 study was reanalyzed using a more appropriate method of calculating traffic demand whilst using other assumptions of the earlier study. Then, a factorial sensitivity study was performed comparing lifecycle costs of hypothetical long-life strategies and conventional rehabilitation strategies, but with more variables than were included in the 1996 study and more appropriate data sourced from recent projects. The RealCost software package, developed by the Federal Highway Administration, was used for all analyses. The results of the analyses showed that for the current data and assumptions (pavement lives, construction productivity, hourly traffic patterns) used in the study together with better traffic delay analysis, the LLP options have greater total costs than conventional rehabilitation alternatives assuming 24-hour-per-day closures for LLP options and 8-hour nighttime closures for conventional alternatives. However, the sensitivity analyses showed that as traffic demand is reduced by implementation of Traffic Management Plans (TMP) and use of weekend closures, the traffic delay costs associated with LLP options are significantly reduced. The sensitivity analyses also showed that if non-pavement costs are reduced for the LLP options (they were not considered for the conventional rehabilitation alternatives), LLP options become competitive for projects with large numbers of lanes. Because of a lack of good pavement performance data, and limited cost data for long-life projects (two projects), the results of the sensitivity analyses presented in this report should be considered in terms of their general trends, and should absolutely not be used to compare different conventional rehabilitation strategies or alternative long life strategies for individual projects without using better and site-specific data. The alternatives considered in this study are all hypothetical cases. The study was limited to rehabilitation strategies only and is not applicable to new construction or widening. The sensitivity analyses made clear the need to perform lifecycle cost analysis for each project using project-specific data for both agency costs and road user costs. Despite the findings of this study, LLP is still considered to be a feasible rehabilitation option. It is thus strongly recommended that LCCA be performed on a case-by-case basis when determining whether to use long-life or conventional strategies as significantly different results could be obtained when project specific data and actual overhead and administration costs are used. An example is provided in the report in which lifecycle cost analyses showed LLP to be more cost-effective than conventional rehabilitation alternatives because the existing pavement condition made some conventional rehabilitation alternatives infeasible, which would have resulted in shorter lives than those assumed in this study. Local conditions resulted in a traffic management plan with significantly greater reduction in traffic demand that that assumed in this study. The results of LCCA are dependent on the following variables which are different for each project: * Traffic demand patterns, including hourly demand, weekday and weekend demand, directional peaks and discretionary versus job-related travel * Alternative routes and modes * Lane and shoulder configurations and highway geometry in each direction * Feasibility and expected life of each rehabilitation strategy, which depend on truck traffic and existing pavement condition in each lane * Expected construction durations Sensitivity analyses should be carried out to identify specific issues that influence the agency and road user costs and which could be managed better to reduce the costs on alternative strategies. There is consensus in the industry that quality LCCA in the design phase of rehabilitation projects can result in more appropriate strategies, considerable total savings (agency and road user) and better cash flow management.

New technologies for wooden poles network asset management

Abstract: Power and telecom companies are placing increasing emphasis on cost effective processes to extend the lives of existing facilities while maintaining adequate levels of safety and reliability. In the case of overhead lines, utilities are facing the problem of the wood poles ageing (most of them will reach the end of their “design lives” over the next 10 to 20 years) combined with some high capital and maintenance budgetary requirements, an overloaded network due to an increasing demand and extreme changing climate effect actions on the overhead structural components.

Access healthcare: a model to provide improved access to high-quality and affordable healthcare.

Abstract: he Access Healthcare model is based on a combination of new and vintage approaches to patient care that work together to provide reasonable solutions to some of the current problems in the healthcare system. The hypothesis of the Access Healthcare model is that if practices can decrease overhead and collect payments at the time of service (i.e., eliminating practicebased insurance billing), then they can reduce fees and increase revenue. I performed an evaluation of several existing North Carolina family medicine practices and then opened a practice based on a model that would address some of the problems that had been observed. This commentary describes the Access Healthcare model and discusses what has been learned from it. Background The Access Healthcare model began as an observational study of existing practice models in the piedmont and triad areas of North Carolina. This particular evaluation began five years ago (2000) and involved several different practices and more than 50 providers. Various types of offices were studied, including a large group practice, a small group practice, and a multi-specialty group practice. The main aspects observed were patient flow, time spent in the waiting room, billing, patient check-in and check-out, verification of insurance, and DNKAs (number of patients who did not keep their appointment). For 42 of the providers, the average charge was $93 per patient visit, the average collection was $39 per patient visit, and the total average overhead was $50 per patient visit. Even though this is an average, it represents an $11 loss per patient seen. Additional study over a 16-month period and review of other innovative approaches from articles in Family Practice Management, Family Practice News, American Medical Association News, local newspapers, and magazines, helped me conceptualize the Access Healthcare model. For three and a half years, the Access Healthcare practice (located in Apex, North Carolina) has provided continuity care for more than 2,000 patients. Practice overhead is consistent at 25%. Charges/collections average $65 per patient. The net practice profit is $48 per patient. The $65 average is made up of the $45 office visit added to the average lab and supply cost of about $20 per patient. This means that the supplies and labs are paying the overhad and the office visit charge is basically the net profit for each provider. This makes it possible to charge less, see fewer patients, and still net a higher reimbursement per encounter than most providers due to the reduced overhead and higher collections. Also, it only takes about three to four patients per day to break-even (and pay overhead costs) with this model.

Just be the dentist

Abstract: The motivation for writing this article is, after 26 years of lecturing around the country and interacting with thousands of dentists a year, I have seen the frustration that dentists have with certain aspects of their practice, specifically in the areas of overhead control, marketing, trying to get new patients, and financial arrangements. I hope that I will give every practicing dentist something to think about and help redefine your priorities as to how to run your practice.

Comparison of incentive-based cooperation strategies for hybrid networks

Abstract: Today's public Wireless LANs are restricted to hotspots. With the current technology, providers can only target a small audience and in turn charge high prices for their service to generate revenue. Also, providers can not react appropriate to dynamic changes of the demand. With multi-hop cellular networks the coverage area can be increased and the installation costs and investment risks for the provider can be reduced. However, the individual customers play an important role in such networks and their participation must be encouraged. Therefore, we propose a cooperation and accounting scheme which introduces monetary rewards. We compare our scheme called CASHnet with the Nuglet scheme using simulations under the criteria of network liveliness as well as goodput, overhead and packet error rate.