Implementing Activity-Based Costing (ABC) is easy! (As long as people aren't involved...)

The tools, techniques, and methods for implementing activity-based costing, while having been developed only in the past decade, are actually well documented and relatively straightforward to apply in any given situation. Failure or success in an implementation therefore usually hinges on how well the human factors are managed-resources, culture, buy-in, and so forth. This paper is based on lessons learned from an implementation of ABC at one of the world's largest semiconductor facilities, IBM Burlington. During the implementation process, a variety of hurdles were encountered, usually related to the people involved, ranging from management to the customers to the ABC team itself. While the effort was ultimately successful, in large part due to the dedication and creativity displayed by the vast majority of people involved, the obstacles (often unintentional) posed by the remainder are worth noting.