The Orgtology Glossary - Operational Cost

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Orgtologist Certification Program (OCP)

The task of an executive team is to ensure performance and secure relevance. That is the bulk of their work. The word “orgtology” joins “organisation” with the Greek word “logy”. The science of organisation. It is a holistic way that helps us to drive relevant performance. This is one thing that business schools often lack to teach. The program is highly suitable for senior managers, directors, and executives.

Term	Definition
Operational Cost	Operational cost is the cost of running the business processes of Org. The traditional understanding of operations is that it excludes support services such as human resource management, procurement, finance, etc. In orgamatics we hold a different view. We see all repetitive activity as operational and all non-repetitive activity as strategic. Repetitive activity must produce efficient outputs, whilst non-repetitive activity must drive effective outcomes. Therefore, purpose, systems, processes, rules, and procedures run operational activity. In so, intent, programmes, and projects drive strategic activity. Operational cost is thus the cost of producing the outputs of Org. This includes all the repetitive activity of Org. Derek Hendrikz introduced the Construct-based Costing System in 2016 to turn programmes, projects, systems, and processes into cost centres. Author - Derek Hendrikz Consulting Hits - 1260 orgtology orgamatics derek hendrikz derek hendrikz consulting purpose processes systems intent procurement procedures rules Operational Cost Operational cost is the cost of running the business processes of Org cost of running the business processes traditional understanding of operations excludes support services human resource management finance different view repetitive activity operational and all non-repetitive activity strategic efficient outputs non-repetitive activity drive effective outcomes operational activity strategic activity producing the outputs Construct-based Costing System turn programmes, projects, systems, and processes into cost centres

Term

Definition

Operational Cost

Operational cost is the cost of running the business processes of Org. The traditional understanding of operations is that it excludes support services such as human resource management, procurement, finance, etc. In orgamatics we hold a different view. We see all repetitive activity as operational and all non-repetitive activity as strategic. Repetitive activity must produce efficient outputs, whilst non-repetitive activity must drive effective outcomes. Therefore, purpose, systems, processes, rules, and procedures run operational activity. In so, intent, programmes, and projects drive strategic activity. Operational cost is thus the cost of producing the outputs of Org. This includes all the repetitive activity of Org. Derek Hendrikz introduced the Construct-based Costing System in 2016 to turn programmes, projects, systems, and processes into cost centres.

Author - Derek Hendrikz Consulting

Hits - 1260