The 123s of ABC in SAP

5INTEGRATED ACTIVITY-BASED COSTING WITH RESPONSIBILITY ACCOUNTING

Prior to the year 2000, there was a huge rush to partially install or completely implement enterprise resource planning (ERP) tools. This push was driven primarily by the need to replace non-Y2K-compliant software packages or outdated technology platforms. After the turn of the millennium, organizations were drawn to customer-related and Internet supporting software applications and implementations, thus pulling the focus away from backroom automation and transactional execution, at least temporarily. While the rush for Internet marketplaces, business to business (B2B), portals, and e-commerce is well founded and can provide huge benefits, to get the most from these tools, the backroom costing engine needs to be fully in force to support them.

These new software applications provide greater access for the internal user to more information and other users, such as suppliers and customers. Easier and quicker access to information can mean more business and opportunities, but it does not guarantee that the new business will be profitable or the relationship cost justified. To be profitable, a company must be very focused on determining whom to do business with and in what manner. This boom in software and hardware technology is akin to immediately laying thousands of new highways and different transportation modes, thus gaining access to an unlimited numbers of people and places. But several questions still beg to ...