ABC methods enable managers to cost out measurements to business simplification and process improvement. Included in Vice Presidents Gore's NPR is the need for government to be more productive with less resources. Productivity also can be improved when costs, risks, and rewards are shared among organizations - the case when business functions and rules are shared and data are integrated. Productivity is a measurement of the performance of activities. Activities can be defined as a named process, function, or task that occurs over time and has recognized results.
Activities use up assigned resources to produce products and services.
Inputs are transformed into outputs under the perimeters set by controls performed by the organization's employees and their tools. Activities can be perceived as consumers of resources in production of materials, services, events, or information. Activities are the common denominator between business process improvement and information improvement. The IDEF0 model, as previously discussed under Chapter 3, Activity Analysis , displays these characteristics for the analyst, and is used in the ABC process. Documenting and understanding activities is necessary in order to improve the business process, since activities are the building blocks of business processes.