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Activity-based management system implementation in higher

education institution: Benefits and challenges

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DOI: 10.1108/10650741011011273

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CWIS
27,1 Activity-based management
system implementation in higher
education institution
40
Benefits and challenges
Noor Azizi Ismail
College of Business, Universiti Utara Malaysia, Sintok, Malaysia

Abstract
Purpose – The purpose of this paper is to discuss how activity-based costing (ABC) technique can be
applied in the context of higher education institutions. It also discusses the obstacles and challenges to
the successful implementation of activity-based management (ABM) in the higher education
environment.
Design/methodology/approach – This paper adopts a combination of case study and survey
approaches. It also uses SAS ABM software to transform the ABC model into a working model.
Findings – The results demonstrate that, using SAS ABM software, implementation of ABC
technique can result in improved information of benefits to the university administrators. However,
several obstacles and challenges especially those relating to supporting information systems may
hamper the success of ABM system implementation.
Originality/value – This is the first paper that investigates the feasibility of ABM system
implementation in higher education institution in Malaysia. It is also the first to use specific software
to transform the ABC into a working model.
Keywords Malaysia, Universities, Activity based costs, Activity based management
Paper type Case study

Campus-Wide Information Systems
Vol. 27 No. 1, 2010
pp. 40-52
q Emerald Group Publishing Limited
1065-0741
DOI 10.1108/10650741011011273
Introduction
There is a widespread recognition that the world is changing and higher education is
one area facing unprecedented challenges. Digital revolution is one development that
has fundamentally changed higher education institutions. In response to this rapidly
changing environment, higher education institutions need to take necessary actions to
pursue opportunities presented by these challenges, as well as responding positively to
the challenges. Universities need to invest heavily in information and communication
technology (ICT) projects such as e-learning and to develop comprehensive campus
information systems to help them achieve their strategic objectives better. These
efforts, however, will further contribute to the rising cost of higher education.
Therefore, effective cost management system is crucial as it could provide university
management with the right information and feedbacks necessary to create value for the
institutions (Cox et al., 1999). Managing modern universities is a big challenge
nowadays as university leaders must strive to work on controlling costs while
aggressively working to address high-quality education. For this purpose, universities
need to find a methodology that can link accounting data to the university strategic
plan as well as performance measures (Qayoumi, 1996). Activity-based costing (ABC)
is one alternative costing method as it could accurately determine the true cost of
providing product or services (Robertson et al., 1998). Gordon and Charles (1998)
reported several universities in the UK that used ABC found ABC information has ABM system
helped them with tighter financial management and resource allocation. While many implementation
universities in developed economies have implemented ABC as a decision support
system (Robertson et al., 1998; Cox et al., 1999; Granof et al., 2000; Whelan, 2008;
Hubbard, 2008), this method is still an alien to most universities in Malaysia.
This paper discusses two important issues relating to ABC. First, it discusses how
ABC technique can be applied in the context of higher education institutions in 41
Malaysia. Second, it discusses the obstacles and challenges to the successful
implementation of ABC in the higher education environment. To test the feasibility and
value of ABC in a university environment, this study uses SAS activity-based
management (ABM) software to transform ABC paper model into a working model.
The ABC model was developed based on activities of an academic department,
Faculty of Accountancy (FAC) of a public university in Malaysia. Several reasons
justify, why a faculty and not a university is chosen as a subject for this study. First,
university costs are as much affected by decisions made at the faculty level as at the
university level. Second, for a pilot project like this, it is thought that the accounting
system of a faculty is more manageable and within the resource constraints of this
project, whereas a university consists of an extraordinarily wide range of
organizational units and thus activities. Finally, FAC is specifically chosen among
other faculties as the majority of faculty members are already having a good
understanding of ABC method.

Literature review
The literature review is divided into three sections. The first section provides an
overview of traditional cost management (TCM) system. The second section discusses,
the differences and advantages of ABC/ABM system over TCM system. Finally, the
third section explains how ABM system can assist higher education institutions
achieve their strategic goals.

Traditional cost management

In many organizations, financial accounting information remains the primary source
of management information (Garrison and Noreen, 2000). However, as Johnson and
Kaplan (1987, p. 1) observed, “today’s management accounting information [. . .] is too
late, too aggregated, and too distorted to be relevant for managers’ planning and
control decision,” The reason is TCM system focused on managing cost by means of
cost-based budgets, standards and variances, established at the departmental or unit
level (Qayoumi, 2008). In such a system, many of the volume-sensitive cost drivers
are attached to the overhead costs as an economical means of ensuring a proper
match between revenues and expenses. This approach tends to over- or
underestimates the costs of products/services based on misleading measures, thus
resulting in erroneous decisions (Cooper, 1988). Recently, organizations need to focus
on processes and activities costs, as well as performance measurements for quality
attributes such as customer satisfaction, reliability, cycle time, flexibility, and
productivity. The critical success factor of any organization require continuous
involvement in managing all activities to ensure that a high-quality service is
provided in the most efficient and effective manner. This means that using generally
accepted accounting principles are not useful in planning, managing, controlling,
CWIS and directing activities, because they do not provide information on how an activity
27,1 is accompanied (Qayoumi, 2008).

Activity-based costing and management

There is a growing body of literature which argues that, compared with TCM, ABC
offers important advantages to organizations. Despite its slow diffusion rate, ABC is
42 now an accepted element of the accounting and control systems of industrial and service
firms (Granof et al., 2000). Basically, ABC is a method that is designed to provide
managers with more accurate product/service costs, clearer insights into what causes
costs to exist and what drives costs and more relevant information for strategic decision
making (Beaujon and Singhal, 1990). In other words, ABC provides a focus on activities
not visible through traditional accounting. With this information, managers can make
better decisions about “what happens in the business?,” “who does what in the
business?,” and “what do activities cost?” (Mahoney, 1997). ABM, on the other hand,
refers to the use of ABC information to understand and to make beneficial changes in the
way institutions do their business in an environment of limited resources and increasing
demands. It is a strategic tool that allows managers to: quantify the value of products
and services; use a common language for benchmarking; look at their activities with a
process view; and choose courses of action based upon ABC information. Moreover,
other management initiatives such as balance scorecard and performance management
draw upon the knowledge created by ABC (Khalid, 2005).

ABM in higher education institutions

According to Robertson et al. (1998, p. 15), service organizations such as universities
need costing systems to perform three primary functions: “financial reporting for
management and statutory purposes; understanding the costs of activities, products,
services and customers; and providing feedback and insights to management on what
causes costs.” They further argues that ABC appears to be the only tool that currently
is able to deliver information to service sector organizations that satisfies the last two
of these primary functions. Public universities like other public sectors have a
tradition of managing operations through budgetary control of cost centres (Granof
et al., 2000). Financial performance is measured by comparing actual and budgeted
results, where most of the costs of a particular cost centre come from resources that
have been committed in advance. This simple financial practice has led to university
management not having accurate knowledge of the costs of the products/services that
are provided or the cost of different student types enrolled. With ABC, university can
gauge the amount of resources that are consumed by individual cost centres
and customers and by the activities and processes that deliver the products to
customers.

Background of case study

This case applies the concept of ABC technique to the business activities of an
academic faculty (FAC). For this purpose, SAS ABM software is used to transform the
ABC model into a working model. FAC is a large academic unit with over 120 lecturers.
It offers two undergraduate degrees, five master degrees and a doctorate degree. Total
student enrolment was 3,952, consisting of 3,055 undergraduate, 67 postgraduate and
69 PhD students. The largest undergraduate classification of students was local
students with 3,780. The international students numbered a mere 36. Of the Master and ABM system
PhD students, half were international. implementation
ABC model
The main objective of this study was to develop an ABC model that can be used by public
universities to estimate the costs of academic programs. Figure 1 shows the conceptual
model of the study. The steps taken to implement the ABC model are discussed. 43
Step 1 – obtain expenditure data
The first step in implementing the ABC model was to obtain annual expenditures for
the fiscal year 2007. FAC receives its resources from the university based on its annual
budgeted funds. Table I provides a breakdown of FAC expenditures. The largest
was salaries and allowances with almost RM7.8 million in annual expenditures or
87 percent of the RM8.8 million totals.

Step 2 – identify resources

Expenditures reported in Table I represented the resources to be assigned to the
identified activities.

Step 3 – identify activities

As typical in many universities, academic staffs engage in four broad categories of
activities: teaching; research; publication; and consultation. In addition, academic
staffs are expected to serve in other service activities such as journal editorial board
Academic/benefits/OE resource costs

Research

Publication

Consultation

Teaching Programs /
Administrative resource costs

students

Services

Admin. Figure 1.
ABC conceptual model
CWIS
RM %
27,1
Salaries and allowances 7,748,038.86 87.2
Benefits 250,000 2.8
Traveling allowances 140,750.00 1.6
Utilities 159,000.00 1.8
44 Supplies 153,450.00 1.7
Rentals 168,000.00 1.9
Table I. Maintenance 248,000.00 2.8
Breakdown Others 19,600.00 0.2
of expenditures Total expenditures 8,886,838.86 100

member and committee of academic and professional bodies. Occasionally, academic

staff also attended workshops and presented papers in seminars and conferences.
Several academic staffs also hold various administrative positions. Finally, academic
administrators and administrative staff members usually involve in other service
and administrative-related activities. Table II provides a breakdown of six activity
pools and activities performed by academic and administrative staffs of FAC.

Step 4 – identify resource drivers and resource driver quantities

The resources costs will be assigned to relevant activities in six-activity cost pools via
identified resource driver and resource driver quantity. A resource driver is a measure
of the quantity of resources consumed by an activity. An example of a resource driver
is the percentage of effort a lecturer spends across the various activities performed.
Examples include lecturing, academic advising and supervision, undertaking research
and consultation and publishing books. For this purpose, academic staffs were first
pooled according to their rank: professors, associate professors, senior lecturers, and
lecturers. The reason is that each category of academic staff is expected to spend their
times differently on each activity, which are reflected by different quantity of resource
driver to each assignment. As illustrated in Table II, each activity pool comprises of
several activities. Teaching activity comprises of lecturing, academic advising, and
academic supervision. For each category of academic staff, the resource driver quantity
will be different. For example, while lecturers and senior lecturers spend most of their
teaching activity giving lectures to undergraduate classes, professors, and associate
professors devote their teaching times giving lectures to postgraduate classes and
supervising Master and PhD students. Similarly, associate professors are expected to
devote more time publishing articles in academic journals compared to senior lecturers
and lecturers. If an academic staff, in particular professors and associate professors,

Activity pools Activities

Teaching Lecturing, academic advising, and academic supervision

Research Preparing proposals and undertaking research
Publication Academic journals, professional journals and others and books and monographs
Table II. Consultation Undertaking consultation
Activity pools and Services University and faculty services, professional services and professional development
activities Administration Academic administration and general administration
also holds administrative positions such as Dean or Head of Department, the resource ABM system
quantity driver (percentage of efforts) need to be adjusted accordingly. implementation
A questionnaire survey was designed to determine, the resource driver quantity for
each activity of each category of lecturers. For each category, ten lecturers were
randomly selected to answer questions relating to the percentage of efforts that they
spent on each activity. The percentage of effort of each activity for each category of
academic staffs was then totalled and divided by the number of responses in each 45
category to calculate the average percentage of effort for each activity and each category
of academic staffs. Similar procedures were carried out for academic administrators and
administrative staffs.

Step 5 – assign resources to activities

Inter-module assignments. The first step is to assign resources to each activity pool using
“inter-module” assignments. Results in Table III indicate that the highest activity costs
was teaching (RM2,646,823), followed by, in descending order of costs amount, research
(RM1,001,425), administration (RM830,962), publication (RM821,153), service (811,179)
and consultation (RM336,538) activities. These activities costs data can be used by the
faculty and/or university administrators to measure the performance of activities
performed by the faculty.
Intra-module assignments. It is important to note that, service and administrative
are activities that support the faculty main activities: teaching, research, publication,
and consultation. Therefore, the assigned costs of both service and administrative
activities need to be re-assigned to those four main activities using “intra-module”
assignments. In this case, the costs were assigned to the category of “others account” of
each activity, using percentage as the activity driver.
After re-assigning the costs of services and administrative activities to the main
activities, the next step is to reassign the costs of several main activities that have
reciprocal relationships such as research, consultation and publication activities. For
example, completed research would lead to publication. Similarly, knowledge gained
from undertaking research and publishing articles and books would boost the
reputation of the lecturers and thus increase their opportunity to receive a consultation
project. Therefore, some of the costs incurred in conducting one activity (i.e. research)
need to be reassigned (using intra-module assignments) to other benefiting activities
(i.e. publication and consultation). Similarly, experiences gained from undertaking these
three activities would further enrich the knowledge of the lecturers, whom will share
their knowledge and experiences with their students as their ultimate beneficiaries.
Finally, assigned costs from research, publication, and consultation activities need
to be reassigned to the respective teaching activities accordingly (details of breakdown
of costs of each activities pools before and after intra-module assignments are available
from the author upon request). These activities costs, when divided by the number of
outputs would yield the unit costs of each activity. For example, if academic staffs
published ten articles in academic journals during the year 2007, the unit costs of
publishing an academic journal for the year 2007 would be RM79,471 (RM794,711/10).
Similarly, if academic staffs submitted a total of ten research proposals during the
year 2007, the unit costs of preparing a research proposal would be RM45,921
(RM459,208/10). The information can be used by the faculty administrator to compare
the performance of its core activities with other faculties (details of resources, resource
 46
27,1
CWIS

Table III.
Activities costs
Teaching Research Publication Consultation Service Admin Idlea Total

Salaries and allowances

Academic
Associate professors 425,839.67 206,905.15 216,528.64 72,176.21 110,670.20 170,817.04 1,202,936.91
Senior lecturers 150,352.36 61,738.89 65,370.59 4,358.04 45,033.08 36,317.00 363,169.96
Lecturers 1,646,744.45 577,927.23 424,741.70 174,074.47 452,593.61 205,407.87 3,481,489.33
On study leave 2,438,759.01 2,438,759.01
Administrative
Academic administrators 26,400.00 26,400.00
Administrative staffs 235,283.65 235,283.65
Benefits 41,666.67 41,666.67 41,666.67 41,666.67 41,666.67 41,666.67 250,000.00
Operating expenses 382,220.00 113,187.50 72,845.00 44,262.50 161,215.00 115,070.00 888,800.00
Total 2,646,823.15 1,001,425.44 821,152.60 336,537.89 811,178.56 830,962.23 2,438,759.01 8,886,838.86
a
Note: This amount refers to the salaries and allowances of academic staff members on study leave, which was considered as idle activity
costs, resource drivers, resource driver quantities, activity pools and activities ABM system
identified in this study are available from the author upon request). implementation
Step 6 – identify cost objects
The ultimate aim of this study was to estimate the costs of academic programs and the
costs of student per program. Therefore, the cost objects identified in this study are
programs and students. 47
Step 7 – Identify activity drivers and activity driver quantities
Finally, the total costs of teaching activities (RM6,448,079.86) will be assigned to the
respective programs using the number of students that are enrolled in each program as
the driver. However, different weights were used to assign the costs for local and
international students. In this case, a higher weight was used for international students
as it is assumed that international students would normally need more guidance and
attention (details of breakdown of activity costs, activity drivers, cost objects, driver
quantities and weight used for this purpose are available from the author upon request).

Step 8 – assign activities to cost objects

Table IV summarizes the costs per program and per student. The data shows that
the highest cost for program was undergraduate, followed by PhD and Master. For the
undergraduate, Bachelor of Accounting (Honours) represents about 80 percent of the
total undergraduate costs. For costs per student, the highest cost per students per
program was PhD student. It is also important to note that the cost per student for
international student is higher than the local student. While the fee for local
undergraduate students is determined by the government, the costs data could be used
by the university administrators to determine the appropriate fee for Master and PhD
students, including international undergraduate students. It is important to note that
the weight used to determine the flow of costs from teaching activities to the cost objects
can be adjusted accordingly to reflect the teaching burden of different student types.

No. of Cost per

Costs (RM) students student

B. Accounting Malaysian 3,326,167.48 3,028 1,098.47

International 59,317.39 27 2,196.94
Sub-total BAcct 3,385,484.86 3,055 1,108.18
B. Accounting (information Malaysian 826,049.52 752 1,098.47
systems)
International 19,772.46 9 2,196.94
Sub-total BAcct. 845,821.98 761 1,111.46
(IS)
Sub-total UG 4,231,306.84 3,816 1,108.83
Master Malaysian 63,711.27 29 2,196.94
International 166,967.46 38 4,393.88
Sub-total master 230,678.72 67 3,442.97
PhD Malaysian 600,447.11 39 15,396.08
International 1,385,647.18 30 46,188.24 Table IV.
Sub-total PhD 1,986,094.29 69 28,783.98 Costs per program
Total 6,448,079.85 3,952 1,631.60 per student
CWIS Discussions
27,1 Table V shows the comparison between traditional reporting and ABC reporting.
As exhibited in Table V, cost information presented in a traditional, account-oriented
fashion provides information about the costs of resources being supplied to make it
possible to carry out the faculty/university mission. Compared to the traditional
reporting, an ABC perspective on the same data provides previously unavailable
48 information about what the faculty and university is getting for their money. It provides
managerial information useful in assessing the faculty’s efficiency in teaching, research,
publication, consultation, services and administration activities. This information,
unquestionably, can be used by university management as a basis to make
budget allocations among faculties, programs and activities. If ABC is implemented

RM Percent

Traditional reporting
Salaries and allow 7,748,038 87.2
Benefits 250,000 2.8
Operating expense
Traveling 140,750 1.6
Utilities 159,000 1.8
Supplies 153,450 1.7
Rentals 168,000 1.9
Maintenance 248,000 2.8
Others 19,600 0.2
ABC reporting
Teaching 2,646,823
Lecturing 1,808,741 20.4
Advising 335,209 3.8
Supervision 78,986 0.9
Others 423,887 4.8
Research 1,001,425
Proposals 459,208 5.2
Research 387,363 4.4
Others 154,854 1.7
Publication 821,153
Academic journal 229,927 2.6
Professional journal 109,116 1.2
Books 367,597 4.1
Others 114,512 1.3
Consultation 336,538 3.8
Service 811,179
University/faculty 377,116 4.2
Prof. service 66,015 0.7
Prof. development 165,166 1.9
Others 202,882 2.3
Administration 830,962
Academic 412,123 4.6
General 262,102 2.9
Table V. Others 156,737 1.8
Comparison of traditional Idle 2,438,759 27.4
and ABC cost reporting Total expenditures 8,886,838 100
across all public universities in Malaysia, the same information can be generated and ABM system
used by the Ministry of Higher Education to make appropriate budget allocations implementation
among universities according to their core businesses (teaching, research, publication
and consultation), or even used the information as a basis to classify the universities as
either a research or a teaching university. While results of this case study provide
interesting insights of what ABC information can do to help faculty or university
management make decisions around its core businesses, it is important to note that the 49
results discussed in this section cannot be generalized beyond the faculty to which the
model is applied. The model used simplified drivers and driver quantities for
assignments exercises and did not include some relevant university costs. Therefore,
they may not provide accurate and details costs information, as they should.
Nevertheless, they are of interest because, for the first time, they point to the types of
findings that application of the model can produce and to classes of issues and
challenges that can be encountered in Malaysian universities environment.

Issues and challenges

The process employed for accomplishing this ABM system implementation brought to
light several obstacles. The first obstacle encountered was obtaining financial data
from relevant departments. Authorization to use the financial data is also an issue.
Much of data required for performing the study were either unavailable or confidential,
especially expenditures relating to salaries and allowances. For example, Bursar
department initially expressed reservations about releasing individual salary and
allowance data. The data are necessary to reclassify salaries and allowances according
to the rank of academic staff members before assignment to the relevant activities
could be made. However, the department finally released and gave the approval for use
of the data after understanding the purpose and design of the study and being
assured that the data would be kept confidential to the extent possible or reported in
aggregate.
A second obstacle encountered was to accurately determine the academic staff
salaries and allowances. Salaries and allowances are assigned to each academic staff
member’s faculty, yet in few instances, an academic staff may also teach one or more
courses offered by other faculty and vice versa. Furthermore, several academic staff
members, while serving the faculty, also held administrative position in other
department or centre. However, the corresponding costs are not charged to those
faculties or departments/centres. In this case, an assumption was made that all costs
incurred by the target faculty, i.e. FAC, were incurred solely by that faculty and for the
purpose of performing activities within the faculty.
A third obstacle encountered was to accurately determine the percentage of effort
performed by academic and administrative staff members on identified faculty
activities. For this purpose, a questionnaire survey was designed and distributed to a
sample of academic staff members to determine the average percentage of effort for
each activity of each category of academic staff. In this case, an assumption was made
that all academic staff in the same category would spend the same amount of time on
the same activity.
A fourth obstacle encountered was to determine appropriate resource driver quantity
for the operating expenses. For example, the common driver used for assigning
maintenance costs to activities is square feet. However, the unavailability of square
CWIS footage data forced the researchers to use a simple percentage as the driver. In this case,
27,1 discussions with several administrative staff members and researchers own experience
was used to determine the appropriate driver quantity for each operating expenses.
A fifth obstacle encountered was to acquire the necessary operational data. Some
data such as the number of students enrolled, and the number of staff member employed,
were readily available. However, operational data relating to some departments or
50 centers were not as readily attainable. While the initial plan was to include the costs of
both faculty and other main servicing departments such as library, academic affairs
department, research and innovation department and computer centre, the
unavailability of these operational data lead to the abandonment of the plan. Getting
cooperation from the respective departments was also a frustrating problem. For future
studies of university costs, it may be preferable to assemble a cross-functional team
consisting of members from all relevant departments or centres to avoid the problem.
The final obstacle encountered in this study was to obtain necessary data to
measure activity performance. ABC approach provides important information useful
in assessing FAC’s efficiency in teaching, research, publication, consultation activities.
The costs data could be used to compare the FAC’s performance in each activity with
other faculties in the university. For example, the costs of preparing proposals when
divided by the number of research proposals submitted would give the costs of
preparing a proposal. Similarly, the costs of publishing articles in academic journals
when divided by the number of articles published in academic journals could be used
to calculate the cost of publishing an article in an academic journal. Unfortunately, the
faculty and research and innovation department did not keep track of the needed data.
In a nutshell, the accounting and information system of FAC, which is part of the
university campus information systems, is insufficient to support ABM system effort
and would require a major overhaul before it would be able to do so. Like the systems
of many public universities in Malaysia, the university campus information systems
focus on transaction processing system, but lack emphasis on analytical processing
system. In other words, the systems are not designed to provide management-related
information (please refer to Ismail (2008), for discussions on IT governance, funding
and structure issues facing public universities in Malaysia), and certainly did not
capture necessary data to “cost out” activities or programs. Therefore,
distributing/assigning costs between faculties and departments (inter- and
intra-module) may not be possible without sufficient supporting data.

Implications and future research opportunities

The importance of sufficient planning prior to implementation of an ABM system
became apparent to the researcher. The team charged with performing the study must
clearly understand the cost objects to be measured, which in this study are programs
and students. In addition, financial and academic administrators must support the
study. This means affected individuals must be willing to devote the necessary time,
share the required data or assist in acquiring it, and provide other assistance or
resources that are needed for a successful study. Also revealed was the importance of
ensuring that issues are understood and adequately resolved by all parties prior to
commencing. Furthermore, all parties must agree to alternative procedures to be
employed. For example, if cost data are unavailable, will estimates be used? And if so,
how will such estimates be made?
 Relating to the future research opportunities, this study may be used to obtain a ABM system
better understanding of the benefits, limitations, and obstacles associated with implementation
utilizing ABC concepts in a higher education environment. The model developed and
demonstrated in this study can serve to further research on the application of ABC
concepts, particularly the use of appropriate cost drivers, in the evaluation of academic
programs and other academic activities. While most previous studies, including this
study, focused on one particular faculty/department, future research may expand the 51
scope of the study to include several faculties/departments for comparisons. Other
interesting issues include: does fund accounting system used in higher education
hinder ABM system implementation to the extent that the time and effort necessary to
generate needed data negates the expected benefits of a cost study? To what extent
does campus information systems supported the ABM system implementation?
To what extent does ABM system implementation simplify the implementation of
performance measurement system of a university?

Conclusions
Higher education sector will see a significant difference between the past and future
trends. Changes will occur more frequently, more intensely, and in a more competitive,
global environment. ICT revolution will radically transform universities, causing a
redefining of students, academic and administrative staff members’ roles, needs and
expectations. The establishments of private universities and twinning degree
programs with renowned foreign universities, which offer first class facilities and
tailor-made programs further add to the challenges facing public universities. The
management of public universities thus needs to embark on a more effective cost
management system that are flexible, timely and provide information critical to
support their decisions. As evidenced in this study, ABC methodology is one important
alternative for public universities to consider to covert to competitive entities. While a
more comprehensive study, possibly with the help of a consultant and a more
comprehensive university information systems to seed the necessary information,
would provide a more meaningful and conclusive ABC model for universities, public
universities is urged to travel in the direction towards which this paper is pointing.
This is important, as the achievements of public universities in the next decade will be
measured in large part, by the way, university management manages costs and
effectively uses them to make right management decisions.

References
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system?”, Journal of Cost Management, Vol. 2, pp. 51-72.
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basics: an activity-based costing approach to planning and financial decision making”,
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New York, NY.
CWIS Gordon, G. and Charles, M. (1998), “Unravelling higher education costs”, Planning for Higher
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About the author

Noor Azizi Ismail is an Associate Professor at College of Business, Universiti Utara Malaysia. He
holds a Bachelor Degree (Accounting), a Master degree (Accounting Systems), and a PhD
(Accounting and Information Systems). He is also a Certified Management Accountant
(Australia). His current research interests include accounting and information systems in small
businesses, the interaction between organisational issues and technical factors in information
systems development, IT governance issues and management accounting systems such as
activity-based management and performance measurement. Noor Azizi Ismail can be contacted
at: azizi833@uum.edu.my

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