A Prototype for Service-Based Costing

Abstract

Service systems consider the co-creation of values in a process between provider and consumer with a win-win situation for both. Service-Dominant Logic demands a new view on economic activities where competences of provider and consumer are the most important resource for value creation. Given these assumptions, we investigate whether costs in a service system shall be accounted in a different way to reflect the change in view. If service provision is seen as a process, activity-based cost models seem to be appropriate. We argue that an extension is necessary, because a service is co-created by resources of service provider and consumer. Furthermore, activities performed by the consumer are not under control and therefore additional uncertainty has to be considered. Our research question is whether we are able to compute service costs with a higher degree of accuracy than with traditional cost models.

Integration of Activity-Based Costing Modifications and LEAN Accounting into Full Cost Calculation

“…Service-Based Costing (S-BC) methodology has been developed for service companies (Dorn & Seiringer, 2013). The S-BC model is based on the Customer Integration Factor, which is subject to assessment by four customer's influence parameters: depth, intensity, frequency, duration.…”

“…Customer's points are linked to the cost coefficient that is used to allocate the indirect costs. These methodology is similar to the Customer Integration Factor (CIF) under the S-BC model (Dorn & Seiringer, 2013). CIF is assessed by four customer's influence parametersdepth, intensity, frequency, and durationfor product cost calculation.…”

“…Production duration for a product is one of the value stream measurement indicators under the LEAN and the DBC (Lelkes & Deis, 2013). It would also be reasonable to integrate customer rating into LEAN accounting (Obara & Wilburn, 2012), which is similar to the CIF under the S-BC (Dorn & Seiringer 2013).…”

“…That prompted the need to explore new methods of cost allocation as well as improvement of the ABC. As a result, modified versions were developed: Time Driven Activity Based Costing TDABC (Kaplan & Anderson, 2004), Monte Carlo ABC (Rauner et al, 2005), Fuzzy ABC (Nachtmann & Needy, 2001;Esmalifalak et al, 2014), Grey Activity Based Costing G-ABC (Raeesi & Amini, 2013), Service-Based Costing S-BC (Dorn & Seiringer, 2013), Duration Based Costing DBC (Lelkes & Deis, 2013;Lelkes, 2015).…”

Service System Analytics: Cost Prediction

“…From previous publications, e.g. [14], we know that a clear semantic of customer factors supports applying a costing method designed for services. Using individual customer attributes to describe the general concept of customer factors requires a generalized approach and stable mapping from attributes to factors and from factors to resources.…”