The cost of the customer Available to Purchase

Uses a case study in the utilities sector to demonstrate how activity‐based cost management (ABCM) techniques provide a clear understanding of the leverage on the business of improving processes, and of the impact that various customer segments have on the profitability of the business. This knowledge leads to process re‐engineering, benchmarking, activity‐based budgeting, and many other useful initiatives. In every company there is a need to improve processes, and to keep and attract the right customers. While many change programmes based on TQM and BPR methodologies deliver a reduction in process costs, most programmes have a blind spot when it comes to linking costs to products and services, and then linking the customers to the processes that serve them. ABCM completes the picture. It is not an accounting technique. Rather, it is at the very heart of any change programme.