Two parameters replace a thousand timesheets.
You do not need a year of survey data to know what your projects cost. Time-driven costing needs two things: a cost per minute of real capacity for each team, and a time equation that says how a project consumes that capacity. From those two parameters it builds the cost of any engagement, updates as the work changes, and never asks an engineer to account for their day in fifteen-minute blocks.
Cost and Profitability Consulting · 150+ models since 2010 · TDABC
TDABC prices IT work with a capacity cost rate per team and time equations per project type. No timesheet surveys, no year of data collection. It produces per-project and per-client margin from the hours you already capture, loads the bench and pre-sales a blended rate ignores, and refreshes itself as your delivery model and tooling change.
Hours recorded are not the same as cost incurred.
Most services firms drown in time data and starve for cost. A timesheet tells you an engineer logged six hours to a project. It does not tell you what those hours cost, whether the work was efficient, or what the two unlogged hours of bench and the unbilled pre-sales before the deal should have cost the same client. The richest tooling in any sector sits on top of a costing method that never turns those hours into a defensible margin.
TDABC closes the gap without adding admin. It takes the capacity you pay for and the drivers you already know, and turns them into the cost of the work, including the hours no timesheet ever carried.
ONE STANDARD PROJECT, BUILT FROM TIME EQUATIONS
Illustrative. A project is built from fixed scoping and deploy plus hours per requirement and per story point. Change the drivers and the cost recomputes, no survey required.
From two parameters to every project's margin.
Capacity cost rate
For each resource group, cost per minute of practical capacity, usually 80 to 85 percent of theoretical. Idle capacity shows as idle capacity, not a heavier rate on the billed work.
Time equations
Fixed scoping and deploy, plus hours per requirement, per story point, per support tier. The equation reads the drivers of the engagement and returns its hours.
Load the unbilled work
Bench, pre-sales, account management and rework attach to the project and client that caused them, so the cost a blended rate hid finally has an owner.
Refresh, don't rebuild
When rates, capacity or drivers move, you change two numbers and the model re-prices. It is built to be run by your team, not by us.
A model nobody can maintain is a slide. TDABC is light enough that your finance team keeps it current as the work changes.
Frequently asked questions
- What is TDABC for IT services?
- Time-Driven Activity-Based Costing prices work with two parameters: a capacity cost rate per resource group, and time equations that describe how each project and client consumes time. It gives per-project and per-client margin without asking anyone to fill in a survey.
- Why not just use timesheets?
- Timesheets record where hours went, not what they cost or whether the work was efficient. They also miss the unbilled time entirely. TDABC turns the hours you already capture into cost by activity, and prices the bench, pre-sales and rework that timesheets never carry.
- How long does a TDABC model take to build?
- A focused diagnostic runs in a few weeks. A full model typically lands in three to six weeks, built alongside your finance team on the data you already hold, so they own and refresh it afterwards.
Turn the hours you already capture into margin.
The Profit Check takes five minutes and no data upload. It shows where a time-driven model would change the numbers you act on most.