Full costing

The Institute of Tropical Medicine in Antwerp, Belgium (ITM) is one of the world's leading institutes for training, research and assistance in tropical medicine and health care in developing countries.

Why TriFinance?

MI&S|TriFinance combines the necessary expertise for this kind of projects. A lot of different knowledge needs to be available to succeed in such a project: finance & controlling, costing and financial systems. Because the new way of working impacts the whole organisation, also a lot of change management was needed to succeed. Finally, also our independence from vendors was a guarantee the best systems were implemented to get the job done. To achieve the final result 4 systems were involved and needed to be aligned: the ERP system (for analytical bookkeeping and project tracking), a newly selected costing system (for allocation of indirect costs), the timesheet system and the reporting system.

The challenge

The ERP package of ITM only captured directly attributable costs and a portion of the salary costs of researchers on a project basis. To have a better insight into the real costs, a new allocation methodology was to be developed and implemented. Especially because a lot of costs in ITM are indirect, more costs needed to be allocated to projects in a transparent and auditable way.

First, a new methodology was validated based on a new analytical model. The timesheet system was upgraded to be aligned with this new model. After a proof-of-concept in excel, the new model was validated and the basics of analytical bookings were introduced in the ERP package.

Because an allocation model is rather complex to be modeled, a specific costing software was selected to run the allocation methodology. The output of the analytical bookkeeping (values and driver units) and timesheets were used in this costing software to calculate and report new analytical insights on the level of ITM with its various departments, but also on the level of the projects.

Since full costing was a new concept for the institute, documentation and training on the concepts and the software were very important for embedding the solution in the organization.

Better insights cost structure

A full cost model has been implemented in a costing tool that enables the institute to analyze and report on the costs of a project or course. Project reporting is available more quickly and is more accurate and auditable (which was important to get potential financing from government bodies). Also, management gets a better insight into the cost structure of the institute, which supports them in the decision making process.

The learnings for our Project Consultant

Because of the different skills needed to succeed in such a project it was an interesting challenge for a senior consultant. He was able to combine his knowledge of analytical bookkeeping in a professional services organization with a full costing methodology. Besides, knowledge of ERP, costing and reporting systems were needed from the technology angle. And clear communication was needed in change management on C-level and throughout the whole organization.