Activity Based Management

ActivityBasedManagement is a management philosophy that includes the technique of ActivityBasedCosting?. it focuses on cross functional activities that consume resources (e.g. financial and HumanResources) to seek better ways of producing value, or eliminate waste. WorkInProgress definition from a various of sources below.


ActivityBasedManagement is the use of activity information to make business management decisions - [US patent and trademark office definition]

The focus of ActivityBasedManagement (ABM) is on the use of ActivityBasedCosting? (ABC)information for management control and continuous improvement, by taking a cross functional viewpoint of activities and business processes. [ from "A Methodology for Enterprise Performance Management" at http://www2.truman.edu/~apresley/dsi97.pdf ]

From Book excerpts at http://www.bookrags.com/other/business/activity-based-management-ebf-01.html

Activity-based management (ABM) is an approach to management in which process managers are given the responsibility and authority to continuously improve the planning and control of operations by focusing on key operational activities. ABM strategically incorporates activity analysis, activity-based costing (ABC), activity based budgeting, life-cycle and target costing, process value analysis, and value-chain analysis. Enhanced effectiveness and efficiencies are expected for both revenue generation and cost in currences. Since the focus is on activities, improved cost management is achieved through better managing those activities that consume resources and drive costs. The focus for control is shifted away from the financial measurement of resources to activities that cause costs to be incurred.

As an overall framework, ABM relies on ABC information. ABC deals with the analysis and assignment of costs. In order to complete cost analyses, activities need to be identified and classified. An activity dictionary can be developed, listing and describing all activities within an organization, including information on each activity's location, performance measure(s), and key value-added and non-value-added attributes. (See "ABC/ABM Dictionary," which was used to help construct many of the definitions used in this entry.)

From WikiPedia stub

Activity-based costing establishes relationships between overhead costs and activities so that overhead costs can be more precisely allocated to products, services, or customer segments. Activity-based management focuses on managing activities to reduce costs and improve customer value.

From a consulting firm

Conventional financial and management accounts fail in that they use the language of expense headings as found in the General Ledger. However, manager can much more easily relate to the resources at their disposal and to the activities undertaken with those resources.

A well-grounded Activity Based Costing model of an enterprise should lift management expectations of what an Activity Based Management System can deliver on an on-going basis.

Another consultancy

ABC Management, the Grandfather of current performance management methodologies has come back into favor within many world-class organizations after originally being dismissed due to the complexity in keeping the model up-to-date.

From course outline

Activity based management (ABM) focuses on the management of activities to improve value to the customer and the performance of the organisation. ABM is a powerful management tool, whether applied in a service, manufacturing, not-for-profit organisation or public sector organisation. Activity-based management can achieve the accurate costing and effective cost management demanded by current competitive conditions and rising customer expectations.


HaHaOnlySerious

StephenCovey said Someone else said: The religion of ABM

Tom Pryor, an ABM practitioner coauthored a book ThePrinciples? (ISBN : 0899000681). This was compared to StevenCovey? Seven Principles book by one person. This is supposedly a fiction that can be applied in real life, by resurrecting principles from times of Bibical Moses.


Resources

Activity-Based Management: For Service Industries, Government Entities, and Nonprofit Organizations James A. Brimson, John Antos ISBN 0-471-33158-9

RobertKaplan? list of ABM references at http://www.people.hbs.edu/rkaplan/abmarticles.html Costing model in 2003 presentation http://www.napawash.org/pc_government_performance/Conference03/fmichalkewicz.pdf


CategoryManagement

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