– 129 – (5.2 – ITU-R) C O S T A L L O C A T I O N Cost centre Activities Outputs Primary costs (for own resources) General activities (cost centre-neutral) Intersec. outputs (Sector-neutral) Costs Costs KPIs Costs KPIs Expected results Expected results perform generate Secondary costs (for other services) Specific activities (cost centre-related) Sector outputs (Sector-related) Costs Costs KPIs Costs KPIs Expected results Expected results P E R F O R M A N C E E V A L U A T I O N 5 Both the own resources (primary costs) and the additionally consumed services (secondary costs) are transformed into activities (e.g. checking orders, producing studies, implementing IT solutions) through a transformational step. Two types of activities are differentiated: general activities, which are common to all cost centres, and specific activities, which are directly linked with the specific characteristics of a given cost centre. To ensure that the activities performed by the cost centres meet requirements in terms of timeliness and quality, so-called key performance indicators (KPIs) are defined to allow an integrated cost/performance analysis. 6 Based on the combination of activities from different cost centres, outputs are generated. Outputs are products delivered and/or services provided to the membership or external customers. A distinction is made between Sector outputs and intersectoral outputs, which are not related to a specific Sector of the Union. For performance evaluation, KPIs are also defined for the different outputs. 7 In order to allocate the costs of the departments of the General Secretariat (GS) and the Bureaux fully to outputs, the proposed cost-allocation methodology applies a sequential process, comprising six steps. Step Action Target Plan cost centre resources by category of expenditure Assignment of staff costs and other costs to cost objects (cost centres and outputs) 1 Planning of net staff capacity in work-months and calculation of rates 2 Determine capacities and costs of staff resources Planning of net delivery capacity in volume (e.g. pages) and calculation of allocation price of activities 3 Allocate resources and capacities to activities Invoicing of internal services (partly SLA-based), by crediting the provider and debiting the receiver 4 Allocate activities to internal service receivers Define rules for the distribution of remaining costs to outputs Calculation of the indirect distribution of remaining costs by key to outputs 5 6 Synthesis – Principle of full costing All costs are allocated to outputs