Activity-Based Costing as a Tool for Process Improvement Evaluations

Back, W. Edward; Maxwell, D A; Isidore, Leroy J.

doi:10.1061/(asce)0742-597x(2000)16:2(48)

Cited by 13 publications

(9 citation statements)

References 5 publications

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“…It is apparent that the ABC system looks for the cause of costs or cost drivers of organizational activities, and traces these activities sequentially to products [20]. By this philosophy, ABC can directly assign manufacturing costs to products and can provide insightful information regarding the authentic costs of an operational process [21]. Therefore, ABC prevents cost distortion.…”

Section: The Abc Conceptmentioning

confidence: 99%

Integrating Activity Based Costing (ABC) with Enterprise Resource Planning (ERP) for Effective Management: A Literature Review

Kitsantas¹,

Vazakidis²,

Stefanou³

2020

Technium

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In the age of a global competition environment, the accurate costing measurement is important for planning and decision-making. To achieve this goal, contemporary costing methods are tested and applied such as the Activity Based Costing (ABC) in conjunction with the use of modern Information Technology (IT). The review study attempts a comparative analysis of both ABC and Traditional Costing Accounting (TCA), examining the main themes emerging from academic research and practitioners concerning the challenges, benefits, and barriers of ABC, analyzing the impact of the integration between ERP and ABC systems and its effect on management performance. A review of the literature generated an initial pool of 322 studies. Upon extensive review, 38 studies were found to be relevant to this topic. It appears from the review and analysis of the academic literature and professional sources that a successful integration among ERP and ABC minimizes the operation costs, enhances competitiveness, improves the management of the enterprise, due to its abilities to provide more accurate costing information for a strategic decision. However, practical implications in adopting ABC under ERP could be very challenging, requires a huge amount of internal resources, commitment among employees, and top management. In closing, additional research studies employing both qualitative and quantitative methods as well as case studies are needed in order to provide insights into the impact of ERP and detailed implications of how the ABC accounting system is adapting to the ERP environment and its effect on firm performance.

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Section: The Abc Conceptmentioning

confidence: 99%

Integrating Activity Based Costing (ABC) with Enterprise Resource Planning (ERP) for Effective Management: A Literature Review

Kitsantas¹,

Vazakidis²,

Stefanou³

2020

Technium

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“…ABC has been used in the construction industry for cost estimating [7]. Further, ABC has been used to forecast the optimum duration of a project as well as the optimum resources required to complete a defined quantity of work in a timely and cost-effective manner [8].…”

Section: Contemporary Issues and Research In Operations Managementmentioning

confidence: 99%

A New Model to Improve Project Time-Cost Trade-Off in Uncertain Environments

Alzarrad¹,

Fonseca²

2018

Contemporary Issues and Research in Operations Management

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The time-cost trade-off problem (TCTP) is fundamental to project scheduling. Risks in estimation of project cost and duration are significant due to uncertainty. This uncertainty cannot be eliminated by any scheduling or estimation techniques. Therefore, a model that can represent uncertainty in the real world to solve time-cost trade-off problems is needed. In this chapter, fuzzy logic is utilized to consider affecting uncertainties in project duration and cost. An optimization algorithm based on time-driven activitybased costing (TDABC) is applied to provide a trade-off between project time and cost. The presented model could solve the time-cost trade-off problem while accounting for uncertainty in project cost and duration. This could help generate a more reliable schedule and mitigate the risk of projects running overbudget or behind schedule.

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“…Without tools such as ABC analysis, companies can only speculate about how suggested improvements may impact the efﬁciency and effectiveness of their operations/processes (Back and Maxwell, 2000). Cannavacciuolo et al (2015) presented a detailed healthcare related case study, where the strong integration between BPM and the accounting methodology – ABC – is explored.…”

Section: How Accounting and Bpm Are Integrated In Current Literaturementioning

confidence: 99%

Nexus between business process management (BPM) and accounting

Abeygunasekera

Bandara

Wynn

et al. 2018

BPMJ

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Purpose Multidisciplinary business process management (BPM) research can reap significant impact. We can particularly benefit from incorporating accounting concepts to address some of the key BPM challenges, such as value-creation and return on investment of BPM activities. However, research which addresses a relationship between BPM and accounting is scarce. The purpose of this paper is to provide a detailed synthesis of the current literature that has integrated accounting aspects with BPM. The authors profile and thematically describe existing research, and derive evidence-based directions to guide future research. Design/methodology/approach A multi-staged structured literature review approach to search for the two broad themes, accounting and BPM, supported by NVivo (to manage the papers and the coding and analysis processes) was designed and followed. Findings The paper confirms the dearth of work that ties the two disciplines, despite the synergetic multidisciplinary results that can be attained. Available literature is mostly from the management accounting perspective and relates to describing how performance management, in particular performance measurement, can be applicable to process improvement initiatives together with tools such as activity-based costing and the balanced scorecard. There is a lack of research that examines BPM in relation to any financial accounting perspectives (such as external reporting). Future research directions are proposed together with implications for practitioners with the findings of this structured literature review. Research limitations/implications The paper provides a detailed synthesis of the existing literature on the nexus between accounting and BPM. It summarizes the implications for practitioners and provides directions for future research by identifying key gaps and opportunities with a sound contextual basis for extension and new work. Originality/value Effective literature reviews create strong foundations for future research and accumulate the otherwise scattered knowledge into a single place. This is the first structured literature review that provides a detailed synthesis of the research that ties together the accounting and BPM disciplines, providing a basis for future research directions together with implications for practitioners.

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Activity-Based Costing as a Tool for Process Improvement Evaluations

Cited by 13 publications

References 5 publications

Integrating Activity Based Costing (ABC) with Enterprise Resource Planning (ERP) for Effective Management: A Literature Review

Integrating Activity Based Costing (ABC) with Enterprise Resource Planning (ERP) for Effective Management: A Literature Review

A New Model to Improve Project Time-Cost Trade-Off in Uncertain Environments

Nexus between business process management (BPM) and accounting

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