5 Frogs on a Log
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16 August 2013 - 22:58, by , in Activity-Based Cost Management, No comments

Five frogs are sitting on a log.

Four decide to jump off. 

Question:  How many are left?
Answer:  Five.  (Because there is a difference between deciding and doing.)

There are a lot more people “deciding” to implement Activity Based Management (ABM) than there are people actually “doing” ABM. A January 1999 survey of people who attended 1998 American Management Association ABM workshops shows:

  1. 22% are “doing” ABM. They successfully self-implemented after the workshop.
  2. 74%“decided” to implement ABM but deferred it to 1999.
  3. 4%could not get senior management to “decide” or “do”.

A similar survey was performed of those organizations that purchased an ABM Self-Implementation Toolkit. Each ABM Toolkit contains PC-software, tutorial, an Activity Dictionary, step-by-step instructions plus an ABM & ABC case study with data disk. That survey shows:

  1. 50%are “doing” ABM. They successfully self-implemented ABM & ABC in less than 120 days.
  2. 50%“decided” to implement ABM but deferred it to 1999.

What can we learn from these two surveys?

  1. In contrast to 5 years ago, managers no longer question the potential benefits of ABM.They have decided that they need ABM to support improved decision-making and continuous improvement.
  2. Your chances of ABM success are greatly enhanced if you purchase an ABM Toolkit … 50% versus 22%.
  3. One ABM Toolkit user shared the following comments regarding their implementation: “We have recognized that certain activities are costing us more than we realized. ABM has inspired a “team” approach by our management to bring about changes to non-value activities that will positively affect our bottom line. ABM has made us a “team” on a common goal.”

Be an ABM doer!

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Tom Pryor
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