conditions for a successful implementation
The successful implementation of ABC depends upon the organizational and behavioural characteristics of the company. The issues such as top management committment, education and training of employees, incentives to motivate employees play a major role in the successful implementation
of ABC in practice. This has been observed from the analysis of the results obtained from the case studies. The details of the conditions for a successful implementation of ABC are presented below.Top management commitment: The top management should commit to a change in the cost ac- counting system. This change program will require suitable guidance, motivation and financial and technical support. The top management should encourage the implementation of ABC by providing these supports.
Educution and training of employees on ABC: The concerned employees of the organization should be equipped with the knowledge of ABC and the benefits that could be derived from them. This will lead to open communication and better co-operation for implementing ABC in a cost-effective manner. Seminars should be arranged to teach and discuss the concepts of ABC and its implementation issues in the factory. Another important aspect of the implementation of ABC is to empower the employees in the change efforts with the objective to motivate them in the implementation process.
Incentives to motivate the employees in implementing ABC: A suitable incentive scheme should be formulated both for the accounting personnel and the people from other functional areas such as marketing, design and engineering and production with an objective to obtain the co-operation for the implementation of ABC in manufacturing.
A simple cost system would be beneficial in terms of application and maintenance. Employees should be empowered with a responsibility and authority on the implementation and use of ABC. The life- cycle management should be considered in the design and implementation of ABC system. The help of a consultancy organization can be sought to avoid any conflict in the management.