Incorporate the Benefits of Activity-Based Costing into the Efficiencies of Your SAP R/3 System
Given SAP's dominance in the enterprise resource planning (ERP) market, many companies and their managers encounter SAP AG applications in some form or another. Many of these organizations have recognized the value of utilizing Activity-Based Costing/Management concepts to perform more accurate cost assignments or drive performance initiatives. Managers are then faced with trying to determine how Activity-Based Costing can be incorporated into the SAP environment. The 123s of ABC in SAP is the first book of its kind designed to help business managers understand the capabilities of the SAP R/3 business application to support Activity-Based Costing, Management, and Budgeting.
Divided into three parts-the conceptual foundation, the capabilities of SAP ABC, and integration with other tools-the book provides readers with the following:
* An explanation of how Activity-Based Costing can be used with SAP
* Helpful hints for implementing ABC into SAP
* Insights into the most common difficulties and potential solutions when implementing ABC into SAP
* Summary tables that highlight key decisions to be made, implementation hints, and organizational challenges
* Detailed descriptions of SAP software applications to support the Activity-Based Costing approach as well as the integration of SAP R/3 with Oros software
* Examples of the tandem usage of Resource Consumption Accounting with Activity-Based Costing
About the Author
DAWN J. SEDGLEY and coauthor CHRISTOPHER F. JACKIW are Partners with Alta Via Consulting, which specializes in strategic cost management, linking financial and operational data to form business information.
Read an Excerpt
Given SAP's dominance in the enterprise resource planning (ERP) market, many companies and their managers encounter SAP AG applications in some form or another. Of those organizations, some utilize Activity-Based Costing/Management concepts to perform more accurate cost assignments or drive performance initiatives. Managers are then faced with trying to determine how Activity-Based Costing can be incorporated into the SAP environment. We have written this book to help business managers understand the capabilities of the SAP R/ 3 business application to support Activity-Based Costing, Management, and Budgeting. This book is not intended as a primer in Activity-Based Costing (ABC): many such conceptual introductions have already been written. In order to bring the focus on the application of ABC concepts to an SAP R/ 3 environment, it is assumed that the reader has knowledge of the ABC framework. This book is divided into three parts: the conceptual foundation, the capabilities of SAP ABC, and integration with other tools. Part One consists of Chapters 1 through 4 and covers the basic conceptual fundamentals to lay the foundation for detailed discussions.
The conceptual foundation begins with Chapter 1, addressing the shortfalls of ABC and introduces the Resource Consumption Accounting philosophy (RCA). This philosophy is heavily incorporated into the design of the SAP Controlling (CO) module, which contains SAP's ABC functionality. The chapter also establishes the differences between ABC and RCA and provides support for the use of both approaches to support management costing needs. Chapter 2 expands the foundation to include analysis of the differences between the two main types of tools that support ABC concepts. Addressed are the core conceptual and technical differences between stand-alone ABC modeling tools utilized to support ABC and an "integrated" ABC tool.
Although it is assumed that the reader understands the basic concepts of ABC principles, we do not assume the reader has any familiarity with the SAP R/ 3 application. Therefore, Chapter 3 provides the reader with a basic understanding of SAP R/ 3, specifically the Controlling module, including the CO-ABC component.
Since there is relatively little information available on the subject of ABC within SAP, many misconceptions abound as to its capabilities and maturity. Chapter 4 chronicles the evolution of ABC within SAP R/ 3. This chapter is useful for managers to determine what overall capabilities are available within the given release of SAP R/ 3 their organization either currently utilizes or is considering implementing.
Part Two, the capabilities of SAP ABC, provides several chapters that detail the integrated ABC capabilities with each individual area within the SAP Controlling module. Chapters 5 through 9 are structured in a similar manner. Each chapter addresses the main functionality highlights of the individual area of focus, the information flows, sample key business decisions to be supported, implementation guidelines or considerations, and ends with a summary table to be utilized as a reference.
Part Three utilizes the same chapter structure to address the combined capabilities of SAP R/ 3 ABC with the Oros modeling tool (Chapter 10) and the SAP Strategic Enterprise Management (SEM) application (Chapter 11).
Table of Contents
LAYING THE FOUNDATION.
Cost Management: A Brief History and the Convergence of Philosophies.
Systems Support of the Activity-Based Costing Philosophy: Stand-alone Analytical ABC versus Integrated ABC.
Overview of SAP and Integrated Activity-Based Costing.
Evolution of SAP's Integrated Activity-Based Costing.
SAP R/3 INTEGRATED ACTIVITY-BASED COSTING.
Integrated Activity-Based Costing with Responsibility Accounting.
Integrated Activity-Based Costing with Overhead Order Accounting.
Integrated Activity-Based Costing with Product Costing and Production Control.
Integrated Activity-Based Costing with Market Segment Analysis.
Integrated Activity-Based Costing.
BEYOND SAP R/3 INTEGRATED ACTIVITY-BASED COSTING.
SAP Integrated Activity-Based Costing Combined with Oros Modeling Capabilities.
Activity-Based Costing/Management with Strategic Enterprise Management.