This implies a need for a change in the accounting information system. The authors explain that a manager must understand ABM and the ABM hierarchy of information. Only then can they design and implement an activity-based management information system. The authors define ABM as the planning, improving, and controlling of an organization's activities to meet customer and external requirements. An ABM hierarchy of information provides a framework for an ABM management information system.
Tasks are the steps necessary to perform an activity.
A business process is a collection of related activities operating under a set of procedures to accomplish a set of objectives such as process a customer order, procure raw materials, or design a new product. It is critically important to note that business processes transcend standard departmental boundaries. Thus, employees must recognize that performance of their activity has a domino effect on those employees in subsequent departments. A department or cost center represents one portion of a function. A department often contains people or machines that share a common purpose or mission.