Linking ABC/M and the Balanced Scorecard

Overview

Activity-Based Costing (ABC), Activity-Based Management (ABM) and the Balanced ScoreCard (BSC) are established management methods. They are building blocks of performance management systems. ABC and ABM provide cost and other business intelligence about key business elements including resources, activities, products, services and customers. The BSC translates strategic goals into a set of performance measures balanced according to the important dimensions of performance. It helps communicate and execute the strategic plan by defining success in quantitative terms at each level of the organization. Successfully linking ABC and the BSC requires a different type of ABC model.