It is a methodology of evaluation and identification of activities, which is performed by an enterprise. It uses an activity based finance in order to carry on a chain value analysis or a reengineering initiative to improve strategic and operational decisions in an organization.
ABM is focused on the activity management to reduce costs and to improve customer value.
The operational ABM helps to improve process efficiency reducing activities that imply only an additional cost; while the strategic ABM implies to use the information to decide what products should be developed and what activities should be done.
It can also be used to measure customer profitability and to focus in the most profitable ones.
