Development of a Cladogram of Cost Management Systems

Several organizations have conventional and activity-based cost management (ABCM) systems or models to determine the costs of their products, services, projects and clients. Field observations have shown that the nature and the architecture of these systems or models vary greatly from one organization to another. The purpose of this paper is to develop a classification system for cost management and ABCM systems or models. To meet this objective, controllers of 42 Canadian and French organizations that have claimed to have changed their cost management systems or implemented ABCM were interviewed to obtain an in-depth vision of the systems or models that they have put in place. Building on the insights gained from these interviews and previous work on cost management system characteristics, the construction of a cladogram is proposed. This cladogram will help academics and practitioners to better understand the nature of their organization's cost management system and to move beyond to a more complex and realistic view of cost management systems whether they are conventional or ABCM.