Cost Management is quite a challenge in today’s business environment, because it requires the understanding of business dynamics which is impossible without an understanding of cause and effect relations in an organization.
Activity-based costing as a cost modeling tool aims at identifying all involving elements in driving an organization’s costs in a seamless integrated way to identify hidden profit and loss among processes and cost objects mix.
It serves ABM as an operational and strategic cost management tool to identify improvement opportunities such as spotting value and non-value adding activates. ABM supports business excellence by providing information to facilitate long-term strategic decisions about such things as product mix and sourcing. ABM also supports the quest for continuous improvement by allowing management to gain new insights into activity performance by focusing attention on the sources of demand for activities and by permitting management to create behavioral incentives to improve one or more aspects of the business.
Experform’s scenario planning and what-if analysis are to provide activity-based management its full capabilities.