What does it cost to provide your customers with your products or services?

Some elements (like bought-in materials) are easy to identify ... others less so. These other costs are often "hidden" by accounting systems because they are collected and reported by department and then arbitrarily apportioned to products and services. This may have no relationship with the way those costs are incurred.

ABM is a mechanism for ensuring that you have resources that are efficient and cost-effective. Your need may be short-lived with the purpose of achieving a step-change in your costs ... or may be on-going by providing information to drive continuous improvement projects.

Typical decisions that use ABM information include:-