ABCM: An Analysis From Innovation Management Perspective

In the 70's of the last century, the manufacture mode and business environment that companies confront had changed a lot by the development of science and technology. But the business management was obsolete in American. Management accounting serving as the decision-making supporting system was out of date too. "Relevance lost: The rise and fall of management accounting", written by famous accounting academician Kaplan R.S., focuses on the incompetence of management accounting as the supplier of decision-relevant information. Professor Kaplan argued that traditional costing management accounting system couldn't provide decision-relevant information. It is on this background that professor Kaplan proposed ABC (Activity-based costing) in later 80's of last century. He argued that ABC could provide more relevant information for decision. Developed by professor Turney, the domination of ABC was expanded from a cost calculating method to a cost management tools, and ABM (activity-based Management) was proposed.However, the implementing was not successful. Many companies did not adopt ABC, relative proportion of companies adopted but abandoned it at last. How can we implement ABCM successfully? What are decisive factors of companies choose ABCM? Many researcher papers about this have been published. On the basis of formal research, using innovation concept to interpret ABCM supposed to be useful. Innovation is defined as creating things not existent or practicing the theory not practiced before. On this view, ABCM is an innovation. Using innovation management conception to manage the ABCM's implementing process is not only possible but also useful. Since complexity and uncertainty dominant the environment of innovation, the whole process of innovation should be paid attention to. Employing process model mentioned in the essay to analyze the implementing of ABC, we would find that it is helpful to manage ABCM as an innovation.