Technology Costing Methodology
Introduction- The modern university paradigm is extremely complex, requiring a balance between student enrolment, staffing, procedures, stakeholder expectations and budgets. The modern educational professional must realize that the position of budgets and fiscal responsibility is tied to costs and expenditures -- which have tended towards exponential increases over the last decade. This has, in effect, caused a situation of continual multiple horizontal priorities. The situation is such that even a simple schedule change or purchase of a broken machine can have dire effects upon the overall budget for the organization. Moreover, modern education is a labor-intensive industry. Fiscal dollars spent on human resource management constitute a large portion of the organization's budget; staff forms a large percentage of that budget. Each employee hour, improperly managed, has the potential of upwards of $80-150 when taken in full consideration of time, training, taxes, delays, etc. Consider if each department simply made this type of error once per week in an organization with only 25 departments; the figure would quickly add up to over $150K per annum with only a minimal mistake, and certainly no positive affectations on the individual client (McCarthy, J., et al., 2008).
Technology Costing Methodology -- An interview was conducted in early October 2013 with Ms. X for Y University, Ms. X has been Assistant Controller for the past 4 years, and holds a BA in Accounting and an MBA in fiscal management. She notes that her background has been in managerial accounting, which in many ways has proven to be inadequate for the challenges faced by modern institutions within the 20t1st century. She noted that managerial accounting has evolved within the modern business paradigm with several methods in use, depending on the type...
The gist of managerial accounting is to use information to make informed business decisions that will positively and proactively impact the organization. Some of these methods like Activity Based Accounting, Lean Accounting, Resource Consumption Accounting and Throughput Account. While she is somewhat familiar with Technology Cost Methodologies, the university has not yet adopted them as part of their standard operating procedures or best practice scenarios (Jones R., 2013).
Traditional accounting methods are over five decades old, and have not changed much in those years. Since modern organizations are different, and resources used are quite different, Ms. X agrees that new methods that look at the way resources are managed are necessary. Technology Costing Methods, for instance, focus both on the way the organization uses technology and ways to more efficiently use technology in a more efficient manner. This method models technology and the process of using technology at a basic level and then looks at ways to ensure more efficiency (for instance in cost of instruction, use of resources per student, or issues that contrast one professor and a group of TAs teaching large classes (Howard, R., et al., 2008). This method, TCM, is a simulation method that compares the costs of two approaches to institutional expansion and/or efficiency -- for example, more face-to-face classes vs. more distance classes (Moore, M., et al., eds., 2008). In a real sense, then, the TCM method is not a set of accounting protocols used only as a cost/benefit analysis, but more of a decision making tool to create models that look at different ways instruction can take place and the overall longer term benefits that may be realized by academic institutions (Jones D., 2004).
Example and Analysis -- University X, for…
