Not surprising, BellSouth's financial architecture focused on government compliance rather than on driving down costs. BellSouth didn't need to know how much individual products cost to produce. Instead, it had to contend with an artificial earnings ceiling. But the regulatory changes switched the emphasis from earnings regulation to price regulation. Hostinsky assembled a team headed by Marshall.
Traditional accounting divides money into buckets such as rent and salary.
ABM methods demand that the contents of those buckets be re-allocated among appropriate activities. Installing fiber-optic cable, for example, might take 0.395 hours of a line man's time as well as the cost of materials, equipment, transportation and a host of other details. The team had to create the new activity-based categories and figure out how to get the data to flow logically from the legacy systems to the new one. Basham began an eight-month exploration of BellSouth's activity analysis in early 1995. Basham had to identify all the parts of each of these areas and decide how they should be divvied up.