Optimizing operational costs to improve accessibility of higher education: a novel integration of activity-based costing and Lean management

This study investigates the integration of cost management and strategic decision-making, focusing on the role of managerial accounting. It aims to explore how advanced cost management techniques, particularly Activity-Based Costing (ABC), contribute to achieving competitive advantage and aligning with strategic objectives. The research employs a qualitative design, using case studies and interviews with senior managers and financial controllers in medium to large manufacturing firms. This approach provides detailed insights into the implementation and effectiveness of ABC and other cost management practices in strategic decision-making. The findings reveal that ABC enhances cost information accuracy, facilitating more informed strategic decisions regarding pricing, product mix, and process improvements. Top management support and a conducive organizational culture are crucial for successful ABC implementation. Firms that regularly update their cost management practices maintain accuracy and relevance in cost information. The balanced scorecard effectively aligns cost management with strategic objectives, improving strategic alignment and decision-making. Organizations should prioritize adopting ABC, ensure strong top management support, and foster a culture of innovation. Regular updates to cost management practices and investment in training programs enhance managerial competencies and decision-making. These findings provide valuable insights for practitioners and scholars, highlighting the strategic role of managerial accounting in driving competitive advantage.

PurposeIntegrated project delivery (IPD) is highly recommended to be utilised with building information management (BIM), specifically with BIM level-3 implementation process. Extant literature highlights the financial management challenges facing the proposed integration. These challenges are mainly related to the IPD compensation and the conventional cost control approaches that are not consistent with IPD principles. As such, this paper presents an integration of several methods to support automating risk/reward sharing amongst project parties thus enhancing IPD core team members’ relationship.Design/methodology/approachThe literature review was used to highlight the challenges that face the IPD-based cost management practices such as the risk sharing/reward sharing amongst IPD core team members and potential methods to bridge the revealed IPD gap. A framework was developed by integrating the activity-based costing (ABC) – as a method to analyse the cost structure – and earned value management (EVM) to develop mathematical models that can determine the three main IPD financial transactions (i.e. …) fairly. To demonstrate the applicability of the developed system, a real-life case study was used, in which, promising results were collected in regard to visualising the cost control data and understanding of the accumulative status of the project cost and schedule for team members.FindingsA centralised cost management system (CCMS) for IPD is developed to enable the IPD cost structure as well as automating the risk-sharing/reward-sharing calculations. This system is linked with a web-based management system to display the output of proposed risk-sharing/reward-sharing models. Moreover, a novel grid is developed to show the project status graphically and to respect the diversity in core team members backgrounds. In addition, the case study showed that the proposed integration of different methods (ABC, EVM, BIM and web-based management system) is interoperable and applicable.Originality/valueThis research presents a comprehensive solution to the most revealed challenges in cost management practices in IPD implementation. The outcome of this research contributes to the body of knowledge through presenting new extensions of the EVM to be used with the IPD approach to calculate risk/reward. Moreover, the implementation of the proposed tools such as centralised cost management system (CCMS) and CCMS for IPD web system will enhance/foster the implementation of the IPD in conjunction with BIM process.

The fundamental purpose of an environmental, safety, and health (ES&H) department or program—to assure worker health and safety and prevent environmental degradation—can be preserved by managers who can use contemporary business management tools to solve complex business and budgetary problems. Traditional cost accounting methods do not provide ES&H managers with the cost data and business process information required to make informed and timely decisions. Activity-based cost management (ABCM) is a business tool that can be used to quantify the cost of ES&H work activities and the cost of developing and delivering ES&H products and services. Additionally, the cost data and business process information that result from applying ABCM can be used to understand why these costs exist. The concepts, principles, and nomenclature associated with the two components of ABCM—activity-based costing (ABC) and activity-based management (ABM)—are discussed in this article, as is the utility of ABCM as a tool for managin...

This article explains the many change management and organizational considerations involved in implementing activity-based management. Avoiding the many possible pitfalls—which have been widely identified and discussed elsewhere—will get users far. But there are also many factors that can help companies as they plan and implement activity-based costing (ABC) and activity-based cost management (ABC/M). © 2002 John Wiley & Sons, Inc.

This is the book that revolutionized ABC/ABM; updated with new systems, strategies, and an expanded focus on service and government organizations. Praise for Cents: 'Common Cents is a great resource for all high level managers to reflect upon as they try to focus on results and customer satisfaction' - Keith Barnes, Chairman and Chief Executive Officer, Electroglas, Inc. 'Peter Turney uses his plain-talking style to illustrate why time-tested principles remain at the cutting edge of management initiatives worldwide. Any organization hoping to streamline business processes, cut costs, or improve profits can benefit from a little more Common Cents' - Chris Pieper, Chairman and Chief Executive Officer, FormRouter, Inc. 'A remarkable book by a remarkable author. Cents puts activity based costing in terms anyone can apply to their situation. Had government started operating this way with Peter Turney's first book 15 years ago, it is certain taxes would be lower today!' - Roxanne Rice, Director of Fiscal and Public Assistance, South Dakota Department of Transportation. 'Peter Turney is one of those rare authors who make complex subjects simple and easy to understand. Cents is a must read for successful executives' - Roger Nagel Wagner, Professor at Lehigh University and Emeritus Director of the Iacocca Institute, Author, Agile Competitors and Virtual Competition. 'Businesses that apply Peter Turney's principles will discover new opportunities for driving growth. They will become adept at manoeuvring their strategic levers to maximize profitability of products, services and customers, thereby building significant shareholder value' - Laura Black, Managing Director, Needham & Company. When designed and executed correctly, cost information programs alert decision makers about problems to overcome and opportunities to take advantage of. The difficulty is, conventional sources of financial information often do just the opposite - they hide or misrepresent problems, fail to identify opportunities, and lead to solutions that are ineffective and potentially perilous. Cents, Second Edition, reveals how Activity-Based Costing (ABC) and Activity-Based Management (ABM) can help you make the right decisions about customer and product mix, marketing channels, and performance improvement. Originally written and now revised and updated by ABC/ABM pioneer Dr. Peter B.B. Turney, this book walks you through each step of the process, giving you the tools to more accurately identify, assign actual costs to, and report on the elements of each customer, product, or service, increasing your organization's process efficiency and profitability. Cents encompasses manufacturing, service, and government organizations. It describes how Deluxe, the U.S. Army, Tektronix, Hewlett-Packard, General Electric, the South Dakota Department of Transportation, and literally hundreds of other organizations achieved the 'ABC performance breakthrough'. Using real-life examples in sectors from financial to telecom, software to healthcare, and transportation to the military, this results-driven book explores: what ABC is, and why it has proven to be so effective at accurately revealing problems and opportunities; how ABC and ABM have improved bottomline performance in manufacturing, service, and government organizations; how ABC and ABM create value in procurement, supply chain, customer support, call centers, operations, shared services, and other areas; latest developments in ABC, including resource planning, capacity management, activity-based budgeting, performance budgeting, decision simulation, and time-based ABC; proven tools of ABM, including customer profitability analysis, strategic analysis, value analysis, cost analysis, storyboarding, life-cycle costing, and target costing; and, an eight step plan for successfully implementing ABC/ABM as a proof of concept or enterprise-wide solution. Whatever business you're in, ABC and ABM can help transform your organization from average to world-class. Cents reveals the hidden opportunities to improve profitability or reduce cost, and shows you how to position your resources and direct initiatives to achieve maximum results.

Integrated project delivery (IPD) is a mode of project procurement recognised as facilitating superior project performance. However, this success is contingent on effective cost management practices that share cost data with all project stakeholders in an accurate, timely and transparent manner. Despite an extensive literature on aspects of cost management, none identifies the essential ingredients required of an effective cost management system, sufficiently robust to support successful IPD projects. Candidate cost management augmenting practices are drawn from the literature, and presented for scrutiny in questionnaire form, to fifty IPD experienced experts, based in the USA, UK and Australia. Findings reveal activity-based costing (ABC) to be effective at identifying overhead costs and creating accounting transparency. Similarly, earned value management (EVM), in combination with ABC, is effective at developing mathematical models for equitable risk-reward distribution. Moreover, web-based management systems, as supported by Building Information Modelling (BIM), are effective at generating trust and collaboration on which IPD success depends. A questionnaire survey using purposive sampling was conducted to assess the factors driving success of implementing IPD regarding cost management process. The contribution to knowledge made by this paper is in identifying requisite support mechanisms essential to elevate traditional cost management practices to the higher standard needed to ensure IPD delivery success.

Importance of this article lies in analysing and calculating cloud costs in the space sector to provide the best services to educational institutions through cloud computing, in conjunction with cost management tools. Problem lies in using traditional methods (management, archiving, archiving, etc.), as they occupy very large areas of land and storage, leading to wasted time and effort and high service costs. This article aims to analyse and calculate cloud costs using both activity-based costing and activity-based management in the cloud. Hypothesis is to use cloud computing in the space sector to analyse and calculate the cost of providing services in conjunction with cost management tools to manage and calculate rationalization using ABC-M systems. Results Cloud computing achieves total cost savings down to the unit cost through (hard savings and soft savings) which can be calculated based on activity-based costing and activity-based management systems as well as providing the best services in educational institutions.

Effective cost management in construction requires accurate estimation, ongoing cost control, value engineering, activity-based costing, cash flow management, and risk adaptation to ensure profitability, financial stability, and project efficiency. This study evaluates the effect of cost management practices on Nigerian construction firms' profitability and financial stability, addressing the unique economic challenges within this sector. Exploring theoretical frameworks such as Activity-Based Costing (ABC), Lean Construction, and Contingency Theory highlights how cost estimation, control, and optimisation can contribute to financial resilience amidst fluctuating costs and economic volatility. The study underscores the importance of adapting global cost management practices to Nigeria's context, where firms encounter inflationary pressures and resource limitations that often compromise financial stability. Findings suggest that tailored cost management approaches, including precise cost estimation, proactive cost control, and value engineering, significantly enhance profitability and cash flow stability, strengthening long-term financial health. This theoretical and conceptual perspective is a foundation for future empirical research to refine cost management practices within Nigeria’s construction industry to bolster competitiveness and sustainability in emerging markets.

Construction project has long been suspected to fail to provide information. Incomplete information provided by cost management system has the potential to misdirect decision making by construction project manager. Construction project need a cost management system that can provide effective information about their project, markets, customers, and counterpart. Through comparison of activity-based cost management (ABCM) and traditional cost management, an ABCM model of construction project that integrate both traditional cost management and ABCM's advantages was constructed. Because of lacking activity coding system and foundation database, the application of ABCM to construction project is not perfect. This paper not only provides an activity-based cost management model but also gives directions for Construction Company how to set up an unblocked, reliable information channel and how to collect material.

The main objective of this research is to show how integrating activity-based costing (ABC) with continuous improvement processes can enhance cost management and operational efficiency. The development of automated firms and global firms has necessitated a shift in principles and measurement accuracy. The principles and concepts have been modified based on economic theory, moving from stable continuous improvement to continuous enhancement, or Kaizen enhancement. The accuracy of the proposed costing system has improved by using modified activity-based costing. The current research has focused on multi-variation in explanatory variables, including the costing system and the degree of enhancement. The suggested costing system should include the modified version of activity-based costing and the new form of continuous enhancement system. The concept of an intelligent supply chain has led to the idea of a cooperative game between all parties in the firm/chain. Intelligent automated systems are closed-loop systems where all members are partners, aiming to maximize global benefits. Resilient considerations indicate different attempts to measure and estimate the multi-effects of externalities and other external effects. This work has closed-to-open excess quantitative models, achieving the cooperative state between different partners. Findings show that ABC helps manufacturing and service sectors identify non-value-adding activities, optimize resource allocation, and reduce costs by providing detailed insights into the true cost of operations. Its integration with continuous improvement strategies amplifies these benefits, enabling businesses to streamline processes, improve efficiency, and enhance profitability. ABC is a valuable tool for identifying non-value-adding activities and optimizing resource allocation. By providing a more accurate understanding of how resources are consumed, ABC can help organizations improve their efficiency, reduce costs, and enhance customer satisfaction.

: The ongoing Department of Defense (DoD) downsizing and reorganization programs have had a significant impact on defense capabilities and resources. Declining defense resources, in particular, are providing significant incentives to improve the management of all costs in the DoD. To improve cost management, the DoD has identified activity-based costing (ABC) and activity-based management (ABM) for defense-wide implementation. ABC is a methodology that measures the cost and performance of activities, resources, and cost objects such as products and services to provide more accurate cost information for managerial decision making. Activity-based management (ABM) complements ABC by using it in the analyses of processes to identify inefficiencies and non-value added activities for process improvement. Although various public and private organizations have implemented ABC, little is known about how military organizations have used ABC information. The purpose of this research is to examine and analyze the experiences of three military organizations to gain insights into how they use ABC information to improve performance. Although the ABC models provided some insights into possible areas for improvement, the results show little evidence that the organizations consistently used the models and acted on the ABC information to improve performance. The failure stems largely from a lack of preparation necessary to effectively use the models to initiate performance improvements. The study offers several recommendations to improve ABC acceptance and use by military organizations.

This paper focuses in cost management practices as competitive tools. Due to recent economic transformations, new cost management practices were developed and traditional ones were improved. Among them, activity-based costing, cost of quality, target cost, life-cycle cost and value chain analysis are referred in literature as the most appropriate to current business environment. Some papers about cost management practices are discussed, and concepts and reasons to use them are analyzed. The research was conducted in 38 big and medium companies during 2005, using an exploratory and descriptive study. Companies are located in West and Northwest Parana, a Brazilian State. The findings were analyzed using descriptive statistics. The results show the companies doesn't use new cost management practices or improved ones. The main reasons are: they don’t know these practices, the cost/benefit relationship isn’t favorable and the preference for conventional cost management practices. Key-words: Cost management. Market. Competitiveness. Continuity.

Activity-based cost management (ABCM) can provide improved information for strategic decisions such as product planning and cost management. While ABCM has been increasingly adopted there is evidence that, for some organizations, promised gains have not eventuated. It appears that the main difficulties in adopting ABCM derive from implementation issues rather than the technical design of the systems. This study examines the role of conflict in ABCM implementation. It is argued that attention to ABCM behavioral implementation enhances cognitive conflict that is then associated with successful ABCM applications, specifically the usefulness of ABCM for product planning and cost management. Lack of attention to these factors generates affective conflict that is associated with less successful applications. Results of an empirical study of 56 managers indicated that cognitive conflict intervenes between ABCM behavioral implementation factors and beneficial outcomes. However, while there were significant negative associations between affective conflict and beneficial outcomes, there were no significant associations between behavioral implementation factors and affective conflict.

The unstable financial landscape of intercollegiate athletics is an issue that many institutions struggle with on a yearly basis. Most research in this area has focused on financial inequalities (Lawrence, 2013; Zimbalist, 2013). Specifically, Lawrence (2010) has proposed a solution that the NCAA and its members consider adopting the Activity-Based Costing (ABC) management tool to manage the financial information accumulated by athletic departments, which they believe would help make costs more transparent. Athletic administrators of NCAA institutions are unclear about the broad financial inequities issues in intercollegiate athletics and the athletic accounting practices of their institutions. Given that Lawrence, Gabriel and Tuttle (2010) and Lawrence (2013) offer a solution to the problem by implementing ABC, it is unknown what athletic administrators think about this possibility. Therefore, the purpose of this study is to ask NCAA athletic administrators their perspectives on NCAA accounting practices. Specifically whether or not their athletic department uses ABC to help them understanding their costs and then to determine why or why they do not use ABC. Our results demonstrate that most athletic departments do not use ABC and the main reason they do not is that they don’t need the detailed information that ABC would provide. This paper helps to us get a better understanding of what athletic departments are doing to understand their costs and it helps to refute prior research claims that ABC would be useful for athletic departments.

As one of the management tools in private sector organizations, Activity Based Costing/Management (ABC/M) provides information and knowledge to make decisions. This study aims to propose an idea of the possibility of implementing ABC/M in government organizations. The research was conducted using a Systematic Literature Review approach. The author collects various articles from reputable journals and proceedings using the Google Scholar database. The selection of articles was adjusted to predetermined inclusion and exclusion criteria. A total of 30 selected articles were analyzed and synthesized. The findings show that the ABC/M system is very likely to be applied to government sector organizations. Reflecting on the successful implementation of the ABC/M method in the public sector, the authors found that the implementation process was not easy. This is supported by the findings of various challenges and obstacles faced by public sector organizations. This research contributes to convincing policy makers that the ABC/M method can be implemented and theoretically contributes to enriching the ABC/M theoretical literature in the public sector, especially in the government sector.
 Keywords : Activity-Based Costing (ABC); Activity-Based Management (ABM); Government Organizations