Activity-Based Information Systems : An Executive's Guide to Implementation

by Mohan Nair

• ISBN13: 9780471324317
• ISBN10: 0471324310
• Edition: CD
• Format: Hardcover
• Copyright: 1999-01-01
• Publisher: Wiley

Summary

"Much has been written on ABC/M, but it is rare to find implementation secrets put together in such an approachable format."-Ashok Vadgama Manager, Configuration Management and ABM Motorola Whether you are looking to improve your business''s bottom line or streamlining your company''s financial decisions, Activity-Based Information Systems provides you with the know-how and expert information you need to get started on the road to success. This is the first book of its kind that examines the complex choices and opportunities available to corporations and individuals embarking on the ABC/M journey. Rather than focusing on the pitfalls of establishing this information system, Mohan Nair outlines-in plain English-the seven keys to establishing the proper conditions for a successful ABC/M implementation. In this unique and groundbreaking book, you''ll also learn about: * The history and framework behind activity-based information systems * The three factors of technology, people, and processes used in implementation * How to make the critical move from implementation start-up to education, and on through the production phases * Four cases of actual implementation and the unique contribution which ABC/M makes in the pursuit of financially endorsed and IT-maintained operational information * The proper checklist to have for basic evaluations of specific information systems Even the latest high-speed technology and desktop applications now routinely used by corporations around the world, the most essential business information that operating managers and CFOs can use today, is still unreachable. It doesn''t have to be. The field of activity-based cost/management (ABC/M) is not simply a cost exercise for technically savvy cost managers; it is a process which can be utilized by nearly any type of business. Implementing an ABC/M project involves focusing on the management of activities as a means to improve the value received by customers, and the subsequent profit achieved by providing this value to customers on a continual basis. The information obtained from ABC and activity-based management (ABM) is quickly becoming vital for operating managers who rely on a high-quality ABC information system to meet their demands. Now, the president of Oregon''s ABC Technologies, author Mohan Nair, meets those demands with Activity-Based Information Systems. Providing a framework for implementing activity-based information systems (ABIS), Mr. Nair, using nontechnical language, examines the strategies for technology evaluation and design, their organizational and financial implications, and technology''s limitations. Executives will appreciate the success-ful implementation strategies contained in this book-strategies that are not focused on avoiding pitfalls, but utilized to create the conditions for success. With proven insights backed by experience, not doctrines, Mr. Nair explains how most implementations have generally focused on the process and people views of an ABC/M endeavor-yet all three views, including a technological view, must be understood and coexist routinely in order to have a truly successful and continuous implementation of ABC/M. However, the book does not simply demonstrate ABC/M and ABIS concepts. Business managers and consultants alike will value Mohan Nair''s perspectives on time-based management, business process reengineering, thruput maximization, budget justification, strategic cost management, and profitability management, as well as how these initiatives relate to ABM. In today''s computer-enabled business world, it pays to have an in-depth knowledge of costing, along with an appreciation for capitalizing on the use of systems and software. There is no simple "recipe" for overnight implementation; however, by following Mohan Nair''s sevenfold steps to successful ABC/M implementation, your company can create the best conditions for success and meet the future head-on with an activity-based information system that is operational

Author Biography

MOHAN NAIR is President and Chief Operating Officer of ABC Technologies in Beaverton, Oregon. He has taught in the field of activity-based information systems as an adjunct professor since 1993 at the J. L. Kellogg School of Management, and has advised several executives in the Global 100 on the implementation of activity-based costing systems.

Table of Contents

About the Author	xvii
Introduction	1	(3)
Challenge with Information	4	(10)
New Frontier of Competitiveness	5	(1)
We Need to Listen to ``Moore''	6	(1)
Information Is No Longer Power	7	(1)
What Brings Relevance to Information?	7	(1)
Relevance Is Subjective	8	(1)
Role of Activity-Based Information in Relevance	9	(1)
Operational Value of Activity-Based Information	10	(2)
Users Are Performing ABC But Sometimes They Do Not Measure It	12	(2)
Evolution of Activity-Based Cost Systems	14	(22)
Clip-by-Clip Example	15	(2)
Did Manufacturing Companies Miss the Evolution?	17	(1)
Then Came Activity-Based Costing	18	(1)
The CAM-I Cross---The Symbol of ABC	19	(2)
Hidden Beauty of the CAM-I Cross	21	(1)
Common Realizations Using ABC and the Cross	22	(2)
Is ABC Just Another Initiative?	24	(1)
Comparison of Fads vs. Embedded Technologies	25	(2)
Food for Thought:ABC in the Food and Grocery Industry	27	(2)
ABC Has Utility	29	(1)
Powerful Side Effects of ABC	30	(1)
ABC/M Is Poised for Growth and Adoption	31	(2)
Where Do We Go from Here?	33	(1)
Understanding the Potential of ABC/M	34	(2)
Activity-Based Management Leaning Life Cycle	36	(10)
Trigger Phase	36	(2)
Education Phase	38	(1)
Pilot Phase	39	(2)
Enterprise Phase	41	(5)
What Is an Activity-Based Information System?	46	(10)
Data Collection and Input Subsystem	47	(2)
Modeling and Analysis Subsystem	49	(3)
Reporting and Deployment Subsystems	52	(1)
Predictive and Planning Subsystems	53	(1)
Infrastructure Subsystem	54	(1)
Virtual Nature of Subsystems	54	(2)
Ultimate Partnership: Activity-Based Costing and Business Intelligence	56	(12)
Three Approaches to ABC/M Systems	56	(1)
Integrated Enterprise System View	57	(1)
Best of Breed: Analytic Applications	58	(1)
The Choice Is to Do Both	59	(1)
Analytic ABC Applications Remain Post-ERP Implementation	59	(1)
What Is Enterprise-wide?	60	(1)
Components of Business Intelligence Software Systems	60	(8)
Sevenfold Way: Implementing Activity-Based Information Systems	68	(6)
First Way: Find he Footprint	74	(19)
From Pitfalls to Enablers	76	(3)
Preparation for the ABC Journey	79	(7)
Understanding Self Demands Careful Observation	86	(3)
Information Can Behave Differently	89	(1)
How to Approach Educating the Organization	89	(1)
Moving from Agreement to Commitment	90	(3)
Second Way: Understand the Evolution of Activity-Based Information Systems	93	(10)
It Is a Jungle Out There	93	(1)
In the Beginning Gazelles Roamed the Landscape	93	(1)
Giraffes Increased the View	94	(1)
The Came The Software Tigers	94	(1)
Strong and Bold Buffalo Decide o Join the Pack	95	(1)
Survival of the Species	95	(1)
What Does the Future Hold?	96	(1)
Deciding Which Software Vendor to Work With	96	(1)
Rules of Engagement in Understanding a Vendor	97	(6)
Third Way: Knowing the Roadmap for Designing an Activity-Based Information System	103	(23)
Politics of an ABC/M Program	104	(1)
Phases of an ABC Exercise	104	(2)
ABC project Worm	106	(18)
Project Managing the Project Phases	124	(2)
Fourth Way: Treat the Endeavor as a Project	126	(7)
Needs of Users Will Always Increase	126	(1)
Defining a Project Schedule with Deliverables	127	(1)
Identify Overall Project Schedules and Systems Design	127	(3)
Develop a Detailed Set of Deliverables and Assign Owners to Each Phase of the Project	130	(1)
Define the level of Involvement for Each Consultant and Vendor	130	(1)
Manage the Activity Dictionary	131	(1)
Establish a Tools Inventory	131	(1)
Poduct and Project Philosophy	132	(1)
Fifth Way: Watch the Eight Obstacles	133	(12)
Obstacles to Success	133	(1)
Data-Gathering Time	134	(1)
Educating Users	134	(6)
Managements Understanding and Support	140	(1)
System Maintenance and Data Replenishment	141	(1)
``Freeloaders'' Resist Change	142	(1)
Searching for Push-Button Solutions	142	(1)
Expecting the Model to Freeze	142	(1)
Hidden Costs	143	(2)
Sixth Way: Align with Strategy	145	(7)
Understanding Strategy and Activities	146	(4)
Strategy and ABC/M	150	(2)
Seventh Way: Plan for Enterprise-Wide Expansion	152	(6)
Design the Team for Enterprise Expansion	153	(1)
Expand the Model Control Technology	154	(1)
Design the Enterprise Configuration	155	(1)
Not All Worlds Are Created Equal	156	(2)
Lessons in Success	158	(27)
Willads Foods: Managing Customer Profitability with ABC Information	159	(7)
Providence Portland Medical Center Gets a $1.6m Shot in the Arm	166	(10)
Us Airways Takes Off with ABC	176	(5)
Grupo Casa Autrey's CFO Drives Profitability Using ABC	181	(4)
Appendix A Checklist for System Selection	185	(8)
Appendix B Informational Web Sites	193	(1)
Suggested Readings	194	(9)
CAM-I Glossary of Terms	203	(17)
Index	220