Activity-based management (ABM) is the use of the activity-based costing tool by process owners to control and improve their operations. Because process analysis is conducted in the building of an activity-based cost model, management knows its business much better and can consequently evaluate value-added and non-value-added activities. Because a certain volume of work produces a certain outcome, what-if analysis can be conducted to determine what resources are required of operations are scaled back or expanded.
