ABM is a technique for managing organizational activity based on the actual cost of the activity. The current accounting procedures allocate costs, overhead, for example, on an organizational unit basis. Correspondingly, the current accounting system does not provide the needed cost information. To implement the organization's strategy, activity-based costing data is needed. Applying the BSC framework to the IT function, the first step is to establish objectives for each perspective.
Customers are concerned with time, quality, performance and service, and costs.
The organization establishes goals for these concerns and then translates them into measures for the Customer Perspective. The organization establishes goals for its Internal Business Perspective for the processes that contribute to customer satisfication. The Financial Perspective focuses on cost efficiency and effectiveness consistent with the IT strategy to reduce the amount of money spent on legacy systems. It also focuses on providing the information within budgeted costs. The organization examines the Growth Perspective and establishes goals for skill levels for software development or acquisition management.