Monitoring that many activities is time consuming and hides where cost savings may be found. The model is no longer practical and dilution hides the problem areas. While software capabilities combined with data availability and accuracy are foremost to getting meaningful results from ABC, the people implementing and using the information determine the success of the project. The project will take excessive time, focus may be lost, and model complexity may destroy its usefulness. On the other side of the coin, even with pristine results, if nobody in your company believes them or is willing to make changes, then the only outcome is information.
Success occurs when the information is used to garner greater profitability.
Many people make the distinction between the information provided by activity-based costing and use of this information. Activity-based costing should be viewed as a powerful management tool. Communication is enhanced with data and performance metrics can be linked to the bottom line. Some say that to effectively manage something, you must be able to measure it. Change by its nature is rarely comfortable for people.