Abstract
This study sets out to prove that Activity-Based Management is still a relevant instrument to facilitate effective management decision-making and organisational improvement. In the light of all the latest techniques and methodologies that currently exist to measure and rectify organisational performance, the obvious question might be “but why Activity-Based Management?”. Whilst certain techniques and methodologies concentrate on either inputs, outputs and / or on the entire process, Activity-Based Management was selected because it specifically analyses the activities (transformation component) of a business, plus the fact that this methodology has been refined and tested with great success in large organisations such as Eskom.
Given the selection of management tools available, an instrument such as Activity-Based Management is usually not implemented alone, but may be supported by one or more other approaches. For this reason, Activity-Based Management is contrasted with several other popular instruments in the literature review.
If properly applied, Activity-Based Management can provide management with a sound decision-making platform for correctly aligning resources and work activities. It produces cost information by linking human resource costs to activities and then tracks these human resource costs (inputs) by activity (transformation) and traces them to the point where products and / or services (outputs) reach their destination / customers (result). It also serves as a useful base to improve strategic and operational decisions and for reviewing and updating the organisation structure of a business.
This study reworks and researches previous data related to a project carried out by Eskom (exploratory research) with the purpose of testing the primary research objective. Based on a predetermined dictionary of activities and an associated data collection form, a census was used to collect the data. The resulting reports highlight the main obstructions to effective performance and they mainly relate to an imbalance of time expenditure amongst the various activities performed, an outdated organisation structure and a misalignment of effort with the new vision and strategies formulated.
The study is concluded with a number of recommendations for improvement and for further study. Briefly, these recommendations address:
shifting the focus from support to core activities and placing a higher emphasis on activities that support the new vision and strategies of the business;
eliminating unnecessary activities and reducing the amount of time wasted; and
eliminating fragmented work, dealing with surplus manpower numbers and revising the organisation structure.
Prof. H.E.C. de Bruyn