What does Activity-based Management (ABM) primarily focus on?

Activity-based Management (ABM) primarily focuses on improving customer satisfaction and profitability by analyzing the costs and activities within an organization. This approach seeks to understand the relationships between activities, costs, and the value provided to customers. By identifying and managing the activities that drive costs and influence customer perception, organizations can enhance their operational efficiency and effectiveness.

In essence, ABM facilitates a more strategic view of how activities contribute to profitability and how they can be optimized to meet customer needs better. The focus is not just on cutting costs or reducing production times but rather on ensuring that resources are used in a way that maximizes value for customers while maintaining or improving profitability. This dual emphasis on customer satisfaction and profitability aligns closely with modern business priorities, where long-term success is driven by meeting customer expectations and maintaining healthy profit margins.