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Difference Between ABC and ABM

ABC vs ABM

ABC means Activity Based Coasting and ABM means Activity Based Management. Both the ABC and ABM are management tools that help in managing business activities. These two help in improving the performance of a business firm or an organization.

ABM mainly focuses on the business processes and managing activities aimed at deriving organisational objectives. The Activity Based Management helps in reducing cost drivers and transfers the resources.

Both ABC and ABM differ in their functions. The Activity Based Coasting relates to

the measurements of the cost and the performance of the various activities, cost objects and resources. The ABC mainly recognizes casual relationships of cost drivers to activities. The Activity Based Management mainly focuses on management of activities as a method for improving the value obtained by the customer and the profit got by giving this value.

The Activity Based Management focuses on the various activities and the business processes that the customer needs and is willing to pay for. The Activity Based Management helps in determining the contribution of each person. This is based on the measures for cost, quality and time. The ABMs also support Balanced Scorecard and is considered to be a basis for Business Process Redesign.

The Activity Based Coasting can be called as a subset of Activity Based Management. The ABC helps in improving the costing by outlining the various expenses like supplies, salaries and rent to activities and outlining these activities to services, business processes, products, customers and distribution.

One of the basic concepts of Activity Based Coasting is that cost is consumed and consumption is managed.

Summary

1. ABM mainly focuses on the business processes and managing activities aimed at deriving organisational objectives.

2. The ABC helps in improving the costing by outlining the various expenses like supplies, salaries and rent to activities and outlining these activities to services, business processes, products, customers and distribution.

3. The Activity Based Coasting can be called as a subset of Activity Based Management.

4. The Activity Based Coasting relates to the measurements of the cost and the performance of the various activities, cost objects and resources.

5. The Activity Based Management mainly focuses on management of activities as a method for improving the value obtained by the customer and the profit got by giving this value.

6. The Activity Based Management helps in determining the contribution of each person and also support Balanced Scorecard. It is considered to be a basis for Business Process Redesign.


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