Comparative Evaluation of The Activity Based Costing Software by Tarun Das

Output Budgeting Software–Tarun Das and E.
Sandagdorj
________________________________________________________________
Comparative Evaluation of the Australian ABC-FOCUS Software and

The local Mongolian ALOCOUS Software for Output Costing
________________________________________________________________
Prof. Tarun Das1, Ph.D.

Mr. E. Sandagdorj2
And Ms. D. Bolormaa3
ADB Capacity Building Project on Governance Reforms

Ministry of Finance, Government of Mongolia
Ulaanbaatar, Mongolia.
January 2008
________________________________________________________________
1
Glocom Inc. (USA) Strategic Planning Expert. Formerly Economic Adviser, Ministry of
Finance and Planning Commission of the Government of India, and Professor (Public
Policy), Institute for Integrated Learning in Management (IILM), New Delhi.
2
National Strategic Planning Expert.
3
National Information Technology Expert.
MOF, Govt. of Mongolia 1 Glocoms Inc. (USA)

Output Budgeting Software–Tarun Das and E. Sandagdorj
________________________________________________________________

CONTENTS
Acknowledgements
1. Background and Methodology
1.1 Methodology
1.2 ABC FOCUS Software
1.3 ALOCOUS Software
2. Demonstration and Trial Runs and Evaluation by Line Ministries
2.1 Availability of relevant data and information for ABC FOCUS

2.2 Need for a simpler software package
2.3 Linkages with BPIS, FISCAL and GFMIS
2.4 Desired hierarchical levels of cost allocations
2.5 Any other comments by Line Ministries
2.6 Views by ABC FOCUS Vendor
3. Concluding observations and recommendations
Selected References
Annex-1: Views of ABC FOCUS Vendor
Annex-2: Software Evaluation reports by the users

________________________________________________________________
Acknowledgements
Authors would like to express their gratitude to the officials of the selected line
Ministries viz. MOF, MOECS, MOH, MOFA, MOJIA, MOSWL and MORT, who
conducted the demonstration and trial runs of the ABC FOCUS and ALOCOUS
software and provided valuable comments on comparative merits and demerits
of the respective Softwares.
Authors are also grateful to Ms. Erdemchimeg, National consultant for Public
Expenditure Management, Mr. Oyubaatar, National IT Consultant for the World
Bank ECTAC Project, and Mr. Nymaa Byuantogtokh, Fiscal Policy and
Coordination Department for their continual advice and co-operation for
conducting demonstration and trial runs.
Authors would like to thank Mr. Cyril Baskir, Cash Focus Pty Limited, Australia
for sending all documents and clarifications in time without any fee and giving
permission for demonstration and test run of the ABC FOCUS Software at
several work stations for six weeks.
Authors would like to thank the local Citicom software company, particularly Ms.
Tsolmon, Functional Specialist and Mr. Jugdernamjil, IT Expert for their continual
help for conducting trial runs and presentation of their software package
ALOCOUS in a workshop organised at the Ministry of Finance.
Finally, authors would like to thank Dr. David Lowey, International IT Expert for
installation of the workstation and for his guidance and advice on the
methodology for evaluation and trial runs on a fast track basis.
It is needless to mention that the authors are solely responsible for the views
expressed here and for any errors and omissions in the report.
Prof. Tarun Das4, Ph.D.

Mr. E. Sandagdorj5
And Ms. D. Bolormaa6
ADB Capacity Building Project on Governance Reforms
Ulaanbaatar, Mongolia.
January 2008
4
Glocom Inc. (USA) Strategic Planning Expert.
5
National Strategic Planning Expert.
6
National Information Technology Expert

________________________________________________________________

Prof. Tarun Das, Mr. E. Sandagdorj and Ms. D. Bolormaa
1. Background and Methodology

1.1 Methodology
Das and Sandagdorj (2007, 2008) have developed detailed methodology for
output costing and output budgeting on the basis of accrual accounting,
benchmarks and performance parameters. In brief, major steps involved in the
activity based costing (ABC) and output budgeting include the following:
Step-1: Specification of outputs/ cost objects/ cost or budget centres

Step-2: Identification of all costs- direct, indirect, overheads, accrued
Step-3: Specifying appropriate costing structure i.e. layers of costs
Step 4: Collection and verification of cost data on General Ledger (GL)
Step 5: Classification of GL costs into direct, indirect, capital related, taxes
Step 6: Methodology for assignment of costs to output
Step 7: Assignment of direct costs
Step-8: Allocation of indirect costs
Step-9: Determination of total cost
Step-10: Output budgeting on the basis of output costs
International IT Expert Mr. David Loewy and local IT consultant Ms. Bolormaa
were assigned the task of selecting or developing suitable software for output
costing, which can be used by the line ministries and the budget entities of
Mongolia for implementing the above-mentioned methodology for output costing
and output budgeting and which should have a demo version for evaluation.
After various rounds of web searching and initial studies, they suggested that the
following two software packages appear to be promising subject to usual IT and
other tests. It was decided that these two software packages may be tested and
run on the basis of actual data, and their relative merits and demerits be
evaluated by the line ministries:
(a) ABC FOCUS Software developed by an Australian vender; and

(b) ALOCOUS Software developed by the local Mongolian vendor Citicom.
Both of these Softwares were installed for trial runs in the offices of the ADB
Capacity Building Project on Governance Reforms and also in the offices of Mr.
Nyamma, Ms. Erdemchimeg and Mr. Oyunbaatar, National IT Consultant for the
World Bank ECTAC Project. Prof. D. Bolormaa prepared the users’ manual and
Questionnaires for comparative evaluation and along with Mr. E. Sandagdorj
supervised the demo and trial runs and prepared users’ evaluation reports.
These two Softwares are described briefly in the following paragraphs.

________________________________________________________________
1.2 ABC FOCUS Software
ABC Focus is an activity-based-costing software for costing products and

services. It is based on a structured approach to cost products, services,
processes, activities and unused capacity. It provides a platform on which pricing
and activities can be adjusted for achieving competitive advantage.
ABC Focus classifies the cost components into six distinct aspects:
• Items to be costed, including products and services (cost objects)
• Costs of the resources – materials, expenses and people (cost lines)
• Resource usage (resource drivers)
• Major and broad activities of the organization (cost pools)
• Activity usage (cost drivers)
• Revenue of the budgetary entity.
Together this is known as a costing model. There can be separate models for
each department or a budget entity of a line ministry. The software includes
extensive reporting, graphing and tree analysis capabilities. Capital cost is also
integrated into the ABC Focus model. The model can be used to monitor costs
every month, and to compare actual costs with budget allocations.
1.3 ALOCOUS Software
This software, developed by the local vendor Citicom, operates on the basis of
the following six stages:
1. Identification of output heads

2. Output costing and planning methodology
3. Output and cost classifications in general ledger
4. Cost allocation to cost drivers and cost centres
5. Output costing on the basis of benchmarks
6. Output performance statements and
From the developer’s point of view, ALOCOUS is fully developed according to

available data and current methodology of output costing, but is not yet fully
tested by the end users.
This software has the following a priori advantages:
(1) It uses the same chart of accounts as used by the MOF.

(2) It is based on the output costing methodology as indicated in the “Manual
for Public sector output specification” of the Ministry of Finance,
Government of Mongolia.
(3) It uses the classifications of costs and outputs based on guidelines
approved by the MOF, Govt. of Mongolia.

________________________________________________________________
(4) It uses specified cost drivers.

(5) It is feasible to estimate costs per person, person days or in US dollars.
(6) All functions and operations are executed automatically.
(7) It can distinguish between core and non-core functions, and direct and
indirect costs.
(8) Originally, it has been developed as an extension module for accounting
software currently used in many budget entities, so it can import and
export data from and to other software such as accounting and budget
consolidating software.
The local IT Company Citicom has developed Public Sector Entities Accounting
Software, which is already being used by about 1900 budget entities. It has also
developed and installed Budget Planning Software for MOF, MOJHA and a few
budget entities of the MOH. The company has also developed consolidation
reports for output costing for several entities.
2. Demonstration and Trial Runs and Evaluations by Line Ministries
During 24 December 2007 to 10 January 2008, BPIS, WB; MOF, FPCD; World
Bank ECTAC Project, and Ministries of Education, Culture and Scinece; Food
and Agriculture; Health; Justice and Internal Affairs; and Social Welfare and
Labor conducted extentive trial runs of both these software package. Specific
evaluation questionnaires and tables were also supplied to them.
Experiences of the trial runs and comparative evaluations by the actual users are
discussed in the following paragraphs.
2.1 Availability of relevant data and information for ABC FOCUS
Ministries were asked whether they are ready to use the Activity Based Costing
(ABC) Software (ABC-FOCUS). In other words, do they have the relevant data
and information at the activity levels for production of various outputs? If not, how
much time will they require to have all data?
All the ministries viz. MOECS, MOH, MOJIA and MOSWL replied that they are
not ready to use ABC software. MOECS added further that the specification of
appropriate activities and building up necessary data will take at least one year.
MOH concluded that the ABC program requires specific and detailed data for
costs calculation and such data do not exist for them. They believe that collection
of necessary data at the activity levels will take a very long period.
2.2 Need for a simpler software package
Ministries were asked whether they need a much simpler and two-stage cost
allocation software for just allocating General Ledger cost items to different cost
centres, and then to outputs and sub-outputs? All the ministries replied that “Yes,

________________________________________________________________
it is true that they need a simpler software for allocation of GL cost items to
different outputs”. MOSWL added further that in this respect the local software
ALOCOUS is much simpler that the ABC Focus.
2.3 Linkages with BPIS, FISCAL and GFMIS
As regards integration with the existing fiscal and financial data base, users were
asked “Can the current Mongolian BPIS and General Ledger Information be
easily imported to the Software package?” All ministries replied that the primary
budgetary and accounting data compiled under the Mongolian system of Budget
Preparation Information System (BPIS) and the MOF Government Financial
Management Information System (GFMIS) can be easily imported to the local
software ALOCOUS. MOECS observed further that it is practically impossible to
import BPIS and GFMIS data to ABC FOCUS.
In fact, the local software vendor Citicom indicated that they are already involved
in budgetary data processing for many budgetary entities in Mongolia, and have
developed ALOCOUS software for cost allocations on the basis of the “Manual
for Public sector output specification” approved by the government.
2.4 Desired hierarchical levels of cost allocations
Ministries were asked whether they really need more than three level of output
specification. But, this question was not clarified properly. Basic purpose was to
know whether there is a need for more than three levels of hierarchical/ vertical
cost allocations viz. firstly, allocation of costs from general ledger to cost centres;
secondly, allocation of costs from cost centres to activities; and thirdly;
allocations of costs from activities to outputs. This is the simplest ABC model. For
other models there could be allocations for sub activities or sub-outputs.
Since the question was not put up properly, MOECS, MOJIA and MOSWL
misunderstood this question and replied that they need more than three
(horizontal) levels of outputs. Only the MOH understood the basic intention of the
question and replied that cost classifications should be clear and simple, and it is
not necessary to have more than three (vertical) levels of cost allocations.
7. Any other comments by Line Ministries
Ministries were requested to give any other comments, which they feel
appropriate. Some of their valuable comments are reproduced below:
MOECS- It is desirable that data for Budget preparation and General ledger
programs should be easily exchanged and shared by these programs.

________________________________________________________________
MOECS- In respect of budget preparation, Program budgeting is better than ABC

and output budgeting; and ALOCOUS software is far more effective in
accounting.
MOH- It is necessary to integrate Softwares for accounting and output costing.

Software should be based on end users’ skills, capacity and real needs; and
should be simple, user-friendly and in Mongolian language. There should be pilot
programs for Software development and testing. Software should be
implemented after accurate testing and sufficient evaluation.
MOH- It is desirable that software should be in Mongolian language. User’s

manual should be clear and understandable. It is desirable that software is
consistent with the existing methodology for accounting, output costing and
budgeting. Besides, the software package should be simple and must have
ability to produce various reports, perform analysis and calculate performance
parameters.
MOSWL- There is a need for piloting ALOCOUS program in agencies and

organisations under the ministry.
Ms. Erdemchimeg, National consultant of Public expenditure for ESTAC –
1. Software to be used in the budget preparation should meet the following

criteria of the top-to-bottom and bottom-to-up budgeting methodologies:
(a) In terms of top-to-bottom budget preperation system, it is neccessary to

control strongly the budget allocations made by the MOF for the portfolio
ministries. In other words, individual budget entities should prepare their
budgets after allocation of total expenditure by the MOF to portfolio
ministries for the budget year. Meanwhile, the software should check
whether the consolidation of the budget estimates for the individual
budget entities are or not within the budget allocations approved by the
higher level authority.
(b) In other words, the output costing software must meet conditions to
prepare the budget within the hard budget constraints rather than
consolidate mechanically budgets of various budget entities. At the level
of line ministries, Public Expenditure Policy Statement (PEPS) should be
embeded in the software.
2. Output costing software should be integrated or interconnected with other

available software for budget entities, for example:
a. BPIS;
b. Accounting software;
c. GFMIS

________________________________________________________________
3. In other words, all software used for budgeting, accounting and

performance should run on universal platform and have the same
interface and ability to exchange data between them.
4. Codes of output and activities used in BPIS should correspond with codes
used in GFMIS.
5. Budgeting and costing software must be used as a tool for providing right
information for policy making and financial analysis at the level of MOF
and line ministries.
2.6 Views of ABC FOCUS Vendor
On the basis of these comments, ABC FOCUS vendor was requested to clarify
whether they will be able to customize and localize their software package for the
government of Mongolia. They were also requested to clarify whether ABC-
FOCUS can be easily integrated with other software of budget entities such as
accounting, payroll, human resource budgeting etc. The vendor’s reply is
reproduced in Annex-1, and is summarized below, which is self-explanatory:
“Our system is designed as a stand-alone application, with all importing done via
Excel spreadsheets. If you want real-time integration with other packages, then
ABC Focus is not for you. This is not something we offer, nor is it wanted by our
clients. Our software is designed to give you an answer quickly with little fuss”.
”However, I do appreciate that you may want a more complex solution. The only
caution we have with that approach is that the simpler you keep it, the more
likelihood you have of having a successful outcome”.
”You have had a chance to try out the standard edition of ABC Focus. You trial
period has now come to an end. Our experience is that those clients who are
interested to go further with us now purchase one full license of ABC Focus.
They use that as a pilot plant setup to build one of their own activity based
costing models in detail. Once they have achieved success with a pilot
installation, they then roll it out through their organization”.
”If you wish to proceed to the next step, I can send you an invoice. I suggest
that you purchase ABC Focus Gold edition, PC license. The price is US $5,600.
Please advise if you wish to proceed to the next step and I shall
have an invoice prepared for you”.
On the basis of above discussion, we make a comparative evaluation of the

ABC-FOCUS and ALOCOUS Software packages in terms of various
performance indicators. The results are summarized in Table-1.

________________________________________________________________
Table-1: Comparative Evaluation of ABC-FOCUS and ALOCOUS Software
ABC Alocou
Evaluation Criteria
Focus s
1. Fully developed and tested Yes 1 No 0
2. Can be developed and tested with little efforts Yes 1 Yes 1
3. Can be customized easily No 0 Yes 1
4. Mongolian version is available No 0 Yes 1
5. Mongolian version can be made with minor cost No 0 Yes 1
6. Easy to use/learn No 0 Yes 1
7. Nice looking user interface Yes 1 Yes 1
8. Ability to do recursive costing Yes 1 Yes 1
9. More than three levels of cost objects Yes 1 No 0
10. Ability to perform process costing in the software Yes 1 Yes 1
11. Robust, multi-format import features No 0 Yes 1
12. Robust, multi-format export features No 0 Yes 1
13. Ability to input data from other programs No 0 Yes 1
14. Capacity utilization features and calculations Yes 1 Yes 1
15. Full multi-user access at the same time Yes 1 Yes 1
16. Ability to deal with multi scenario Yes 1 Yes 1
17. Budget vs. actual cost comparisons Yes 1 Yes 1
18. Value for money analysis Yes 1 Yes 1
19. Built-in report writer, report generator Yes 1 Yes 1
20. Generation of pre-defined reports Yes 1 Yes 1
21. User-defined fields and attributes Yes 1 Yes 1
22. Link to executive information systems Yes 1 No 0
23. Support to audit Yes 1 Yes 1
24. Responsible technical support Yes 1 Yes 1
25. Immediate technical help, if needed No 0 Yes 1
26. Vender’s past experience with Mongolian govt No 0 Yes 1
High 0 Low 1
27. Initial Price
$ 5600 $800
28. Costs for maintenance and support High 0 Low 1
1 25
29. Total Rating
7
It can be observed from the above table that although ALOCOUS is not yet fully
developed and tested, it is simpler and more suitable for the Mongolian budget
entities. It can be developed fully with little efforts and with much less cost than
attempts for localizing and customizing the ABC FOCUS.

________________________________________________________________
3. Concluding Observations and Recommendations
3.1 Concluding Observations
The demonstration and trial runs of the Australian ABC FOCUS Software for
output costing by the selected line ministries (viz. MOECS, MOF, MOFA, MOH,
MOJIA, MOSWL, MORTT and the World Bank ECTAC Project) for four weeks
during December 2007 and January 2008 lead to the following conclusions:
(a) Although ABC FOCUS Software is fully developed and tested, it is very
complicated, requires huge data and does not suit budget entities in
Mongolia.
(b) The customization and localization of the software will be not only very
expensive but also impossible because the required detailed data at the
activity levels are not available in the line ministries and budget entities, and
building up such data base may take a number of years.
(c) Furthermore, one of the disadvantages of ABC FOCUS is that it is not
available in Mongolian language. It is one of the very important criteria for
successful implementation of any software especially business specific
software and maximizing its business value.
(d) ABC FOCUS is not consistent with the other software packages such as
BPIS, FISCAL and GFMIS being used for accounting and auditing by the
Mongolian budget entities. Importing of the already processed data in other
software packages to ABC FOCUS and vice versa are not feasible in the
present form of ABC FOCUS.
(e) In fact, Mr. Cyril Baskir, Manager, Cash Focus Pty Limited mentioned that
ABC FOCUS is designed as a stand-alone application, with all importing done
via Excel spreadsheets. If any client wants real-time integration with other
software packages, then ABC Focus is not suitable for them. They also donot
provide any technical consultancy for that, as their existing clients had never
asked for such assistance until now.
(f) Mr. Baskir further mentioned that, as per their experience, those clients who
are interested to go further after demonstration and trial runs purchase one
full license of ABC Focus. They use that as a pilot plant setup to build one of
their own activity-based-costing models in detail. Once they have achieved
success with a pilot installation, they then roll it out through their organization.

________________________________________________________________
On the other hand, demonstration and trial runs of the local Mongolian software
ALOCOUS lead to the following conclusions:
(a) Although ALOCOUS is not yet fully developed and tested, it is simpler and
more suitable than the ABC FOCUS for the Mongolian budget entities.
(b) It can be developed fully with little efforts and with much less cost than
attempts for localizing and customizing the ABC FOCUS.
(c) ALOCOUS is fully consistent with the methodology and systems for
auditing and accounting in Mongolia and the vendors have sufficient
knowledge and experience of the Mongolian budgeting and accounting
systems, methodology and sources of data.
(d) Selected ministries replied that the primary budgetary and accounting
data compiled under the Mongolian Budget Preparation Information
System (BPIS) and the MOF Government Financial Management
Information System (GFMIS) and FISCAL can be easily imported to the
local software ALOCOUS.
(e) In fact, the local software vendor Citicom is already involved in budgetary
data processing for many budgetary entities in Mongolia, and has
developed ALOCOUS software for cost allocations on the basis of the
“Manual for Public sector output specification” approved by the govt.
3.2 Recommendations
On the basis of above mentioned observations, we recommend the following:
1. Local Mongolian output costing software ALOCOUS is preferable and

more suitable for the Mongolian budgetary entities.
2. However, the software needs to be developed fully to take care of the

needs of the budgetary entities and to align it fully with their outputs,
methodology and benchmarks for costing and budgeting.
3. Selected ministries (viz. MOECS, MOF, MOFA, MOH, MOJIA, MOSWL,

and MORTT) who have gone through the demonstration and trial runs
may be designated as pilot ministries for building up necessary database
and developing, testing and calibrating ALOCOUS fully to suit their needs
for output costing and output budgeting.
4. In order to stimulate and encourage the testing, calibration and further

improvement of the local software, on the one side, MOF should request
all budget entities to submit their budget preparation on the basis of

________________________________________________________________
strategic plans and output costing. On the other hand, MOF should make
a proper and flexible agreement and contract with the Citicom company,
which could bring mutual benefits and progress for both parties in terms of
the implementation of output based costing and development of its
supportive software.
5. However, as ABC FOCUS is fully developed and tested software for

output costing, MOF may purchase one full license of ABC Focus. This
can be used to provide ideas and technical knowledge to the pilot
ministries to develop associated computer algorithms and to modify and
develop fully the local ALOCOUS software to suit their specific needs. The
one-time purchase price of the ABC Focus Gold edition, PC license at US
$5,600 appears to be reasonable. We are confident that this small
investment will be highly rewarding for the IT experts of the budgetary
entities, and the benefits for the pilot ministries will be much larger than
the expenditure. However, buying the same software for about 3600
budget entities in Mongolia will cost US$20 million and cannot be justified
as the local software can be developed at a fraction of this total cost.
Selected References
Cash Focus (2008) ABC Cash Focus Manual for demonstration and trial run,
pp.1-17, Cash Focus Pty Limited, Australia.
Citicom (2008) Alocous Software Manual for demonstration and trial run, pp.1-
24, Citicom, Ulaanbaatar, Mongolia.
Das, Tarun and E. Sandagdorj (2007a) Output costing and output budgeting,
pp.1-50, ADB Capacity Building Project on Governance Reforms, Ministry of
Finance, Govt of Mongolia, Ulaanbaatar, October 2007.
_______ (2007b) Output Costing Methodology for Software Selection- Basic

Concepts and Some Advices for Selection, pp.1-9, ADB Capacity Building
Project on Governance Reforms, Ministry of Finance, Govt of Mongolia,
Ulaanbaatar, December 2007.
Gurowka, Jim (2005a) Activity-based costing software- The market explodes,

pp.1-12, Focused Management Information Inc., of Oakville, Ontario.
_______ (2005b) It Ain't the Software- an Article on ABC Software, pp.1-3,

Focused Management Information Inc., of Oakville, Ontario.

________________________________________________________________
Annex-1: Clarifications by ABC-FOCUS Vender
FW: Questions related to ABC Focus

From: dbolormaa (dbolormaa@ife.edu.mn)
Sent: Tuesday, January 22, 2008 5:11:48 AM
To: Dr. David W. Loewy (dloewy@hppm.org); Tarun Das
(das.tarun@hotmail.com); enkhtuul khurel (enkhtuulkhurel@yahoo.com); E
Sandagdorj (sandag_e@yahoo.com)
-----Original Message-----
From: Cyril Baskir [mailto:cyril@cashfocus.com]
Sent: 2008 оны 1 дүгээр сарын 16 14:20
To: dbolormaa@ife.edu.mn
Subject: Re: Questions related to ABC Focus
Dear Ms. Bolormaa
Thanks for your email. Our system is designed as a stand-alone application, with
all importing done via Excel spreadsheets. From an IT perspective, there is really
no setup required. All you have to do is install the software (as you have seen
with the install file supplied to you).
If you want real-time integration with other packages, then ABC Focus is not for
you. This is not something we offer, nor is it wanted by our clients. Our software
is designed to give you an answer quickly with little fuss.
However, I do appreciate that you may want a more complex solution. The only
caution we have with that approach is that the simpler you keep it, the more
likelihood you have of having a successful outcome.
You have had a chance to try out the standard edition of ABC Focus. You trial
period has now come to an end. Our experience is that those clients who are
interested to go further with us now purchase one full license of ABC Focus.
They use that as a pilot plant setup to build one of their own activity based
costing models in detail. Once they have achieved success with a pilot
installation, they then roll it out through their organization.
If you wish to proceed to the next step, I can send you an invoice. I suggest that
you purchase ABC Focus Gold edition, PC license. The price is US $5,600.
Please advise if you wish to proceed to the next step and I shall
have an invoice prepared for you.
Kind regards
Cyril Baskir
Cash Focus Pty Limited
Solutions for tomorrow's profits
Web: www.cashfocus.com

________________________________________________________________
----- Original Message -----

From: <dbolormaa@ife.edu.mn>
To: <cyril@cashfocus.com>
Cc: <dloewy@hppm.org>; <enkhtuulkhurel@yahoo.com>;
<sandag_e@yahoo.com>; <das.tarun@hotmail.com>;
<oyunbaatar@yahoo.com>
Sent: Tuesday, January 15, 2008 4:20 PM
Subject: Questions related to ABC Focus
Dear Cyril,
We have tested your ABC Focus software. In the process of software trial runs,
the following questions were raised by the users:
- What kind of complete system is used in budget entities in Australia?
- How ABC Focus is interconnected to other software of budget entities such as

accounting, payroll, human resource budgeting etc?
- What type of Australian or international standards or other official documents

were used in the functional requirements for software?
- Do you have any other detailed manual, user's guides and samples etc?
I would appreciate receiving any information responding to above questions and

any other pertinent matters.
Thank you very much for your time and attention.
Best Regards,
Ms. Bolormaa
Local MIT expert
ADB Capacity Building Project on Governance Reforms.

________________________________________________________________
Annex-2: Evaluation reports by users
GENERAL QUESTIONS
Questions Responses
Not ready. Approval and
endorsement of appropriate data will
take at least one year. MoECS
Is the Ministry ready to use the
Not ready MoJIA
Activity Based Costing (ABC)
Software? In other words, do they Not ready. MoSWL
have the relevant data and MOH is not ready to implement and
information? If not, how long will use ABC software, because the
they take to have all data? program requires pre-calculated
data for identified cost objects. Lack
of sufficient and appropriate data. It
takes time to build up data base. MoH
Yes, we need MoECS
Or, at present, do you need much Yes, we need MoJIA

simpler software for allocating the Yes, we need. Alocous is much
General Ledger expenditure to simpler than ABC Focus. I do not
different outputs and sub-outputs? know about ABC FOCUS because I
did not test the program enough. MoSWL
Yes, we need MoH
It is impossible to import data to
ABC Focus. However, it is possible
to integrate Alocous and Fiscal
Can the current Mongolian BPIS software. MoECS
and General Ledger Information be
Possible for Alocous MoJIA
easily imported to the SW package?
Possible for Alocous, easy to import
from primary accounting program. MoSWL
Possible MoH
Yes, we need at least 5 levels MoECS
Does the Ministry really need more

than three level of output Yes MoJIA
specification? Yes MoSWL
Not necessary. Cost classifications
should be clear and simple MoH

________________________________________________________________
Other suggestions:
It is desirable that data of Budget preparation and General

ledger programs would exchange between those programs
MoECS
Fiscal program is better in respect of budget preparation,
and ALOCOUS program is far more effective in accounting.
To implement integrated software for accounting and

output costing, Software should be based on end users'
skills, capacity and real needs and should be simple, user-
friendly and in Mongolian language. Software should be
implemented after accurate testing and evaluation.
MoH
It is desirable that software is in Mongolian language.
User's manual should be understandable. It is desirable
that software would be consistent with accounting,
budgeting and output costing. Besides, the software should
be simple and not complex, and should have ability to
produce various reports, perform analysis and calculation.
There is a need of piloting ALOCOUS program in agencies MoSWL

and organisations of this sector.

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Comparative Evaluation of The Activity Based Costing Software by Tarun Das

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Output Budgeting Software–Tarun Das and E.

Comparative Evaluation of the Australian ABC-FOCUS Software and

Prof. Tarun Das1, Ph.D.

ADB Capacity Building Project on Governance Reforms

MOF, Govt. of Mongolia 1 Glocoms Inc. (USA)

Comparative Evaluation of the Australian ABC-FOCUS Software and

1. Background and Methodology

2. Demonstration and Trial Runs and Evaluation by Line Ministries

2.1 Availability of relevant data and information for ABC FOCUS

3. Concluding observations and recommendations

Annex-1: Views of ABC FOCUS Vendor

Annex-2: Software Evaluation reports by the users

MOF, Govt. of Mongolia 2 Glocoms Inc. (USA)

Prof. Tarun Das4, Ph.D.

MOF, Govt. of Mongolia 3 Glocoms Inc. (USA)

Comparative Evaluation of the Australian ABC-FOCUS Software and

Prof. Tarun Das, Mr. E. Sandagdorj and Ms. D. Bolormaa

1. Background and Methodology

Step-1: Specification of outputs/ cost objects/ cost or budget centres

(a) ABC FOCUS Software developed by an Australian vender; and

MOF, Govt. of Mongolia 4 Glocoms Inc. (USA)

1.2 ABC FOCUS Software

ABC Focus is an activity-based-costing software for costing products and

1.3 ALOCOUS Software

1. Identification of output heads

From the developer’s point of view, ALOCOUS is fully developed according to

This software has the following a priori advantages:

(1) It uses the same chart of accounts as used by the MOF.

MOF, Govt. of Mongolia 5 Glocoms Inc. (USA)

(4) It uses specified cost drivers.

2. Demonstration and Trial Runs and Evaluations by Line Ministries

2.1 Availability of relevant data and information for ABC FOCUS

2.2 Need for a simpler software package

MOF, Govt. of Mongolia 6 Glocoms Inc. (USA)

2.3 Linkages with BPIS, FISCAL and GFMIS

2.4 Desired hierarchical levels of cost allocations

7. Any other comments by Line Ministries

MOF, Govt. of Mongolia 7 Glocoms Inc. (USA)

MOECS- In respect of budget preparation, Program budgeting is better than ABC

MOH- It is necessary to integrate Softwares for accounting and output costing.

MOH- It is desirable that software should be in Mongolian language. User’s

MOSWL- There is a need for piloting ALOCOUS program in agencies and

Ms. Erdemchimeg, National consultant of Public expenditure for ESTAC –

1. Software to be used in the budget preparation should meet the following

(a) In terms of top-to-bottom budget preperation system, it is neccessary to

2. Output costing software should be integrated or interconnected with other

MOF, Govt. of Mongolia 8 Glocoms Inc. (USA)

3. In other words, all software used for budgeting, accounting and

2.6 Views of ABC FOCUS Vendor

On the basis of above discussion, we make a comparative evaluation of the

MOF, Govt. of Mongolia 9 Glocoms Inc. (USA)

Table-1: Comparative Evaluation of ABC-FOCUS and ALOCOUS Software

MOF, Govt. of Mongolia 10 Glocoms Inc. (USA)

3. Concluding Observations and Recommendations

3.1 Concluding Observations

MOF, Govt. of Mongolia 11 Glocoms Inc. (USA)

On the basis of above mentioned observations, we recommend the following:

1. Local Mongolian output costing software ALOCOUS is preferable and

2. However, the software needs to be developed fully to take care of the

3. Selected ministries (viz. MOECS, MOF, MOFA, MOH, MOJIA, MOSWL,

4. In order to stimulate and encourage the testing, calibration and further

MOF, Govt. of Mongolia 12 Glocoms Inc. (USA)

5. However, as ABC FOCUS is fully developed and tested software for