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Activity-Based Management Modeling Components

Activity-Based Management uses models—complete sets of rules to define individual activity-based costing model objects and their relationship to your organization's financial management system, primarily the general ledger. Models let you specify different business scenarios for comparative analysis. Activity-Based Management lets you define, run, and analyze models to assess your organization's profitability.

Image: Modeling components

Create models in Activity-Based Management by defining the following components.

Modeling components


Resources—such as people, facilities, and costs associated with people and expenses—are the economic elements consumed while performing activities. They are the core elements that let your organization operate.


Activities consume resources and drive costs to cost objects. The lowest-level definition of what your organization does, activities are the foundation for measuring activity costs.

Cost Objects

Cost objects represent cost information grouped by profitability dimensions—products, customers, and channels. With your model's resources and activities linked to cost objects, which are the final results of the activities performed by your organization, they are often the focal point of profitability analysis.

Ledger Mappers

Ledger mappers relate expense data from your general ledger accounts to resource objects. You can map multiple ledger line item amounts to one or more resource IDs in the following two ways:

  • An actual amount that represents actual costs of the accounting period results

  • A budgeted amount that you can use to calculate the capacity rates as well as budgeted model results


Drivers—transactional, duration, and intensity—let you assign monetary amounts from one object to another throughout the model (calculated by amount, percentage, spread even, and direct) in different ways depending on assignment type and object type. You can even assign drivers across business units.


Pointers specify the location of driver quantities in the Operational Warehouse - Enriched (OWE) tables. Rather than entering and maintaining static driver quantities, pointers let you to extract values from any location in the OWE, and then use these values as driver quantities.