Please get in touch for more information about how we can help your business today.

Get In Touch


Whether you are trying to reduce your operating expenses, improve efficiency or determine how much to charge your customers, gaining an understanding of your cost structure is an important first step. 

Once you know the real cost of your activities, the next step is to implement Activity Based Management (ABM), through a program that facilitates change and innovation. 

What Is Activity-Based Management?

Activity-based management (ABM) is a system for determining the profitability of every aspect of a business so that its strengths can be enhanced and its weaknesses can either be improved or eliminated altogether.

There are two main types of activity-based management:

Operational activity based management – this relates to making the organisation more efficient by reducing the cost of the activities and eliminating those activities that do not add value.

Strategic activity based management – which essentially involves deciding which products to make, and which customers to sell to, based on the more accurate analysis of product and customer profitability that activity based costing allows.

What does DMAIC offer?

Implementing an ABM study is likely to be a significant project that must be planned and performed carefully. A project of this nature will affect all departments and employees within the scope of the study and we will begin to question every activity. 

The planning and communication before, during and after the project will have a major impact on its success. Although there are many complicated and unique challenges faced in every business, the key to any successful ABM study lies in its effective design and implementation.

In order for DMAIC to achieve a successful outome when implementing an ABM study, the management team will need to have have key roles in managing the overall scope and in communicating with employees to manage expectations and ensure ownership of the results.

The DMAIC team have experience of planning and managing these projects and can work in unison with your management team to deliver results.


Stages in ABM

An ABM study has 3 core steps which our DMAIC consultants can define and implement for you:

  • Identify the activities that the organisation performs.
  • Calculate the cost of each activity.
  • Identify the primary cost driver for each activity.


  • Undertaking an ABM study allows you to understand, control and reduce costs at their source.
  • The knowledge gained from an ABM study leads to better decisions and the datum it provides allows your business to measure improvement.
  • The results of an ABM study enables management to create effective, data led strategies for lines of business, product mix, process and product design, service offerings, capital investments, and pricing.
  • ABM can be used as the basis of a system for continuous improvement.
  • The information gained during an ABM study helps an organisation identify and enhance value-added activities.
  • The same information can be used to identify and eliminate or reduce non-value activities.

Please get in touch for more information about how we can help your business today.

Get In Touch