Could ABC threaten the survival of your company?

Article Abstract:

A pen manufacturing and marketing encountered difficulties when it decided to implement an activity-based costing (ABC) approach to managerial accounting. One of its strategic business team implemented an activity-based reorganization of the company's product costs to recognize indirect labor and other overhead costs related to the manufacture of a new product in one of its facilities. The ABC model significantly improved the cost of the unit's product line. However, management was concerned that this might compel other unit leaders to adopt ABC for their own interests. Doing so may reduce their own costs but undermine those of other units. Fortunately, these unit leaders were aware of the potential consequences of drastic ABC adoption on the whole organization. The traditional accounting system was maintained for established products while ABC was used for new products. Other implications of ABC were addressed by the company.

Pen and Mechanical Pencil Manufacturing, Pens and mechanical pencils, Pens & Mechanical Pencils, Cost Accounting, Pens

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ABM at Lawson: beyond the technology

Article Abstract:

The information systems provider Lawson Software implemented activity-based management (ABM) in 1996 with the aim of generating the analytical information it needs to make strategic decisions. The ABM system was introduced in time with the installation of its own LAWSON INSIGHT business management system to the organization. The first phase of the implementation process was training and vision development, which involved holding of visioning sessions and developing customizing training. The remaining phases involved software implementation planning, pilot project implementation and company-wide rollout planning. Although ABM is not yet fully implemented at the company, management is optimistic of its success, which it hopes will help add value to customers and prospects.

Prepackaged software, Computer Software, Software Publishers, Computer software industry, Software industry, Software, Cover Story, Lawson Software

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