Good afternoon to Dr and everyone, my name is gui xue ching matric number
277223. I will proceed with the presentation of the advantages of activity-based
management. The first advantage is establishing a pricing strategy. ABM
supports better pricing practices through more accurate costing and can be used
to identify underutilized resources and associated costs that can be reduced.
The second one is supporting a technology leadership strategy. Technology
leadership encompasses how a leader uses technology during their daily tasks
and duties while leading others to complete their assigned tasks and duties.
Using ABM software enables manager to determine cost, profitability and
drivers. They can improve processes by identifying and eliminating activities that
don’t add value. The third one is developing customer strategy. ABM can
determine the total profitability of a customer based on its purchases, sales
returns, and use of time of the customer service department spent. The fourth
one is identifying value enhancement opportunities. Value enhancement is all
about profitability, cash flows and efficiency. ABM is analysing a company’s
profitability by looking at each aspect of its business to determine strengths and
weaknesses. ABM is used to help management find out which areas of business
are losing money so that they can be improved or cut altogether. The last one is
cost leadership (business strategy). ABM enables a firm who wishes to gain a
competitive advantage following a cost leadership strategy focus their attention
on increasing the efficiency of production processes to lower production costs.
Low costs allow them to lower prices while still making a profit. Next sildes.
However, there are a few disadvantages of ABM. First, ABM may ignore the
intrinsic value of activities and focuses only on the quantifiable and financial
aspects of each activity. For example, an ABM analysis may recommend renting
a less fancy office to save costs but a company needs a modern workplace to
attract new talent. Second, there are chances of interference with strategic
decision. A new strategic direction may be quite expensive in short-term but has
prospects for a long-term payoff that are difficult to quantify under ABM analysis.
The last one is the success of ABM depends on successful implementation of
ABC. It means that if a company fails to implement ABC properly, then it may fail
to reap the benefits of ABM. Next slides. This article is about the implementation
of ABM in Higher Education Institution. This study uses SAS ABM software to
transform ABC paper model into a working model. The ABC model was
developed based on activities of Faculty of Accountancy of UUM. One of the
benefits gained from ABC reporting compared to traditional reporting is it
provides previously unavailable information about what faculty university is
getting for their money Next, it provides managerial information useful in
assessing the faculty’s efficiency in teaching, research, publication, consultation,
services and administration activities. This information can be used by university
management as a basis to make budget allocations among faculties, programs
and activities. However, in the process of implementing ABM system, a few
obstacles had been faced. In conclusion, the result demonstrates that using SAS
ABM software and implementation of ABC can result in improved information
of benefits to the university administrator although there are challenges needs
to be encountered. That’s all from us. Thank you.