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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ABC vs ABM
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