ABSTRACT
In fact, any element of performance can be important if it is related to success in the marketplace. Their integration has been more formally recognized by the use of a number of frameworks that attempt to bring a more rational balance to the variety of measures used in the business. Activity Based Management (ABM) is a key component of these measurement frameworks. It provides the basis for management to make better informed decisions, both on positioning and capability. ABM becomes a powerful tool to understand and answer fundamental questions that arise around processes, products and customers. It informs key aspects of capability, particularly when used to understand process costs, failures within processes, and to establish the link between costs and the drivers of cost. The underlying behaviour of costs and an understanding of what drives costs provide the knowledge and insights to drive improvements. Capability creates the costs in the business.
