After Action ReconciliationCase A Case B Spending What was Expected $X $X What was Achieved $X - $20 $X+$20 Delta $20 $20 Reconciliation Format Good News Story $ $ Good News Story $ $ Ba
Trang 1Explain Causes of Variances with the Reconciliation
Format
Intermediate Cost Analysis
and Management
Trang 2Could the Battle of the Bulge Have Been Won if All Battle Maps of Ardennes Forest Looked Like This?
Trang 3Terminal Learning Objective
handouts, readings, and spreadsheet tools and awareness of Operational
Environment (OE)/Contemporary Operational Environment (COE) variables and actors.
• Describe content of effective cost intelligence briefing
• Prepare reconciliation for cost intelligence
Trang 43d ACR Feb 7, 2011 Non-deployables Review
21 pages
Trang 5How Can the Cost War Be Won if All Cost Reports Look Like
This?
• It can’t –
• Of course, someone needs to know where the trees are, but
• Effective command and control needs intelligence formatted in more useful ways
• Formatting cost information for effective command and control is critically important
Trang 6After Action Reconciliation
Case A Case B Spending
What was Expected $X $X
What was Achieved $X - $20 $X+$20
Delta $20 ($20)
Reconciliation Format
Good News Story $ $
Good News Story $ $
Bad News Story ($) ($)
Bad News Story ($) ($)
Total Explained $20 ($20)
Trang 7After Action Reconciliation
Case A Case B Spending
What was Expected $X $X
What was Achieved $X - $20 $X+$20
Delta $20 ($20)
Reconciliation Format
Good News Story $ $
Good News Story $ $
Bad News Story ($) ($)
Bad News Story ($) ($)
Total Explained $20 ($20)
The coster provides this part: the credible intelligence
The coster provides this part: the credible intelligence
Trang 8After Action Reconciliation
Case A Case B Spending
What was Expected $X $X
What was Achieved $X - $20 $X+$20
Delta $20 ($20)
Reconciliation Format
Good News Story $ $
Good News Story $ $
Bad News Story ($) ($)
Bad News Story ($) ($)
Total Explained $20 ($20)
The accountable, operational manager prepares and presents this part: the story
The accountable, operational manager prepares and presents this part: the story
Trang 9After Action Reconciliation
Case A Case B Spending
What was Expected $X $X
What was Achieved $X - $20 $X+$20
Delta $20 ($20)
Reconciliation Format
Good News Story $ $
Good News Story $ $
Bad News Story ($) ($)
Bad News Story ($) ($)
Total Explained $20 ($20)
or variance
This is a favorable variance since actual cost is lower than expected cost
The technical accounting term for this is a “goodie” This is a favorable variance since actual cost is lower than expected cost
The technical accounting term for this is a “goodie”
Trang 10After Action Reconciliation
Case A Case B Spending
What was Expected $X $X
What was Achieved $X - $20 $X+$20
Delta $20 ($20)
Reconciliation Format
Good News Story $ $
Good News Story $ $
Bad News Story ($) ($)
Bad News Story ($) ($)
Total Explained $20 ($20)
or variance
This is an unfavorable variance since actual cost exceeds expected
cost
The technical accounting term for this is a “baddie”
This is an unfavorable variance since actual cost exceeds expected
cost
The technical accounting term for this is a “baddie”
Trang 11After Action Reconciliation
Case A Case B Spending
What was Expected $X $X
What was Achieved $X - $20 $X+$20
Delta $20 ($20)
Reconciliation Format
Good News Story $ $
Good News Story $ $
Bad News Story ($) ($)
Bad News Story ($) ($)
Trang 12Learning Check
• Who prepares the first part of the After Action Reconciliation report?
• What is the goal of the second part of the report?
Trang 13Exercise: Construct the AAR Reconciliation Slide
Trang 14Exercise: Construct the AAR Reconciliation Slide
Trang 15After Action Reconciliation
Spending
What was expected
What was achieved
Delta
Reconciliation
Total Explained
Trang 16After Action Reconciliation
Spending
Reconciliation
Total Explained
Trang 17After Action Reconciliation
Spending
Trang 18After Action Reconciliation
Spending
Reconciliation
Total Explained
More good news!
Trang 19After Action Reconciliation
Spending
Reconciliation
Total Explained
This is a “bad news” story
Trang 20After Action Reconciliation
Spending
Reconciliation
Total Explained
More bad news
Trang 21After Action Reconciliation
Spending
Reconciliation
Trang 22Learning Check
• If actual cost is greater than planned cost, how will it be displayed in the After Action Reconciliation?
Trang 23Exercise: Redo the Previous AAR by Considering Volume Variance Effects
variable cost variable cost fixed cost variable cost
Trang 24Exercise: Redo the Previous AAR by Considering Volume Variance Effects
variable cost variable cost fixed cost variable cost
Trang 25Exercise: Redo the Previous AAR by Considering Volume Variance Effects
variable cost variable cost fixed cost variable cost
Trang 26Variance Template
Plan (100 units)
Volume Variance Flex
(80 units)
Perf.
Variance
Actual (80 units)
Var Cost
Fixed Cost
Total Cost
Trang 27Variance Template
Plan (100 units)
Volume Variance Flex
(80 units)
Perf.
Variance
Actual (80 units)
Trang 28After Action Reconciliation
Spending
Reconciliation
Total Explained
Trang 29After Action Reconciliation
Spending
Reconciliation
Trang 30Exercise: Redo the Previous AAR by Considering Volume Variance, Sales, and Profit Effects
variable cost variable cost fixed cost variable cost
planned a $10 per unit price
planned a $10 per unit price
got a $13 per got a $13 per
Trang 31Variance Template
Plan (100 units)
Volume Variance Flex
(80 units)
Perf
Variance
Actual (80 units)
Revenue
Var Cost
Fixed Cost
Profit
Trang 32Variance Template
Plan (100 units)
Volume Variance Flex
(80 units)
Perf
Variance
Actual (80 units)
Trang 33After Action Reconciliation
Trang 34After Action Reconciliation
Trang 35• The AAR format is critically important to facilitating command and control
• It varies to suit the issues at hand and can evolve as the issues change
• It pinpoints variances to expectation and demands a story from the accountable manager
• Some additional, possible formats and typical explanatory elements follow
Trang 36Simple Cost Results and Reconciliation
Direct Cost
Indirect Cost
Reason 1: Change in Number of Units
Reason 2: Change in Direct Cost
Reason 3: Change in Indirect Cost
Reconciliation Explanation for Delta for Output A
Trang 37P&L View Results and Reconciliation
Fee Revenue
Cost
Reason 1: Change in Revenue
Reason 2: Change in Number of Units
Reason 3: Change in Cost
Reconciliation Explanation for Delta for Residual
Trang 38Unit Cost Results and Reconciliation
Reason 1: Change in Number of Units
Reason 2: Change in Direct Cost
Reason 3: Change in Indirect Cost
Reconciliation Explanation for Unit Cost Delta
Trang 39Spreadsheet Exercise
• Redo the previous exercises using the spreadsheet
• Which do you prefer?