(ArthurAndersenletterhead)Mr.ThomasSmithProcurementManagerPublicServiceElectricandGasCompany80ParkPlazaNewark,NJ07102DearMr.Smith:ThisletterandtheaccompanyingreferencematerialconstitutesourresponsetoyourJanuary18,1996requestforinformation;ABC/ABMresources.WeunderstandyouareacceleratingyourABMeffortsinresponsetothemorecompetitiveenvironmentfacingPSE&G.Accordingly,youhavedeterminedthatABC/ABMresourceswillbeneededoveranestimatedtwoyearperiod.Specifically,weunderstandyourequireandhaverequestedthefollowingresourcesandexpertise:·Leadershipresourcestoguide,direct,andchallengePSE&Gtoensurethebestinclasscapability.·Projectmanagerstoleadindividualdiagnosticsforspecificareasoftheorganization.·ProjectsupporttoassistPSE&Gprojectleadersinengagementsthroughouttheorganization.·Knowledgetransferincludingtrainingmaterials,experiencedtrainersandfacilitators.WeunderstandthestatusofyourABMinitiativestobeasfollows:·YouhaveinitiatedseveralABMpilotprogramsindifferentareasofthebusiness,thefirstofwhichwasthecustomeroperationsbusinessunit.·EachofthesepiloteffortswerealignedtoprocessesdefinedbytheCorporateProcessImprovementTeaminlate1993.·PrimaryABMapplicationshavebeenproductcosting,budgeting,andcostestimation.Secondaryapplicationshavebeenprocessimprovement,profitabilityanalysis,performancemeasurement,costreduction,reengineering,andprojectmanagement.·AsasponsoroftheABMBestPracticeStudyyouarefamiliarwiththeuseandapplicationofABMsystems.TheremainderofthisletterrepresentsabriefoverviewoftheABC/ABMresourcesArthurAndersencanprovidetoPSE&Gtoassistandeffectivelycompletetheinitiativesyoucurrentlyhaveinplace.LeadershipLevelThisisthemostimportantresourcewebringtothetable.Seniormanagersmustbesatisfiedthattheconsultantadvicetheyaregettingrepresentsthebestinclasscapabilityandabroadrangeofknowledgeandexpertise.Othersintheorganizationmusthaveconfidenceintheconsultingleadershipandbelievetheyaregettingthebestadviceandconsulavailable.Webringbothtoolsandpeopletomeetthisresourcerequirement;Firstthetools.·ABMBestPracticeDiagnostic.ThistoolcanbeusedtoassessacurrentABMinitiative,toprepareanABMimplementationplan,andtomonitorprogressagainstaplan.TheABMBestPracticeDiagnosticrepresentsaconsolidationofourABMbestpracticeknowledgegainedfromourparticipationandleadershipintheABMBestPracticeStudyconductedbytheAmericanProductivity&QualityCenter,participationandleadershipinCAM-I,theworldsleadingcostmanagementconsortium,andourworld-wideexperienceinABMimplementations.TheABMBestPracticeDiagnosticidentifiesanddescribes50BestPracticeCriteriawhichcanbescoredonthebasisof1-5,where5isbestpracticeforthatspecificcriteria.·GlobalBestPracticesKnowledgeBase.Thisproprietarytoolcatalogsbusinessprocessesforcomparison.ItincludesbestpracticeinformationonkeybusinessprocessesbasedonouruniqueProcessClassificationSchemecreatedinpartnershipwiththeInternationalBenchmarkingClearinghouse.Italsoincludesbestpracticesrelatedtokeyindustryissues,includingregulatedindustrieslikeutilities.WithourGlobalBestPracticeKnowledgeBase,organizationsareassuredthattherecommendations,consultation,andadvicewegiveisgroundedinourknowledgeofbestpractices.·AdvancedCostManagementCompetencyCenter.BasedinDallas,wehaveateamof16peopleresponsibleforthecontinuingdevelopmentofourActivity-BasedCostingandActivity-BasedManagementservices.·InthesecondquarterofthisyearwewilllaunchPh...
