FROM:ArthurAndersenLLPDallas,Texas214/741-8059CONTACT:JeanCreechMakovsky&Company212/508-9646ARTHURANDERSENRELEASESLANDMARKBOOKONACTIVITY-BASEDMANAGEMENTAcase-studybasedguideforewordedbyStephenR.CoveyDallas,TX,January16,1996--Activity-basedmanagement(ABM)--asetoftoolsforhelpingcompaniesenhancerevenue,reducecostsandincreaseproductivity--isthesubjectofanewbooktitledActivity-BasedManagement:ArthurAndersen'sLessonsfromtheABMBattlefield(MasterMediaLtd.,January1996).Thebook,whichdetailsthepitfallsandbenefitsofABM,hasbeenlaudedbynotedmanagementexpertandauthorStephenR.CoveyasprovidingrealinsightintoABMasamajorbreakthroughinmanagementpractice."Thosewholookdeeplyintotheprocessofactivity-basedmanagementwillfindthatitisanareaofmanagementthatwillempowerthemwiththesolidinformationabouttheirorganizationsthatenablesthemtoexerciseleadershipandwisdomindecisionmaking,"saysCovey,authorofThe7HabitsofHighlyEffectivePeople.--more--PageTwo,ArthurAndersen"ABMisawayoflookingatabusinessfromtheoperationalviewpoint,"saysStevePlayer,thepartnerinchargeofArthurAndersen'sCostManagementpracticeandco-authorofthebookwithDavidKeys,professorofaccountancyatNorthernIllinoisUniversity."Ithelpscompaniesidentifyandunderstandthetruedriversoftheirprofitability.Oncetheorganizationunderstandstheworkoccurringinitsoperatingunits,inthemanagers'officesandinthecorneroffice,itcanrecognizetheactivitiesthataddvalueandaremission-critical,aswellasthosethatareredundant,oflowervalueandgenerateexcesscosts."Playernotesthatactivity-basedmanagementisoneofthemosteffectivestrategicmanagementtoolsacompanycanusetoencouragegrowthandimprovedecisionmakingandresults.Becauseitisoftenmisunderstoodandmisapplied,ArthurAndersendevelopedapragmatic,case-study-basedbooktoserveasaguideforexecutiveswithcompaniesofallsizesthatareconsideringABM.Activity-BasedManagement:ArthurAndersen'sLessonsfromtheABMBattlefieldprovidesexamplesfromawidevarietyofcompanies,suchasHewlett-Packard,Hoffmann-LaRoche,Pennzoil,AT&TandAmericanExpress,thathaveimplementedABMprograms.Includedineachcasestudyisa"lessonslearned"section.--more--PageThree,ArthurAndersen“Thebookwaswrittentoprovidemorethanadvice,”saysPlayer,“butarealsetoftools.”Nowavailableinbookstoresnationwide,thebookfocusesonhowtogetanABMprogramstartedandhowtodevelopapilotprogram.ExecutiveswilllearnhowtheircompaniescanlinkABMtootherprocessimprovementinitiatives,suchasTQM,EVAandBusinessProcessReengineering,howimportanttop-managementbuy-inistothesuccessoftheproject,howtocollectdatatoidentifyessentialactivitiesandwhichinternalemployeesshouldbeincludedontheimplementationteam.ThefinalsectionofthebookexaminesactualABMprogramsfrombeginningtoend,enablingexecutivestolearnfromtheexperiencesofgloballeadersinavarietyofindustries.Thesecasestudiesprovideaninsider'slookatthedifficulties,successesandlessonsthesecompanieslearnedintheprocessofputtinganABMtoworkintheircompanies"ArthurAndersenexceedstheindustrystandardswiththiscomprehensivebookthatdetailstheoftenuntoldcostmanagementprojects--theonesthatfail,"saysRickFinkbeiner,seniorvicepresident,NordicTrack."Bydetailingthepitfallsandhowto-more-PageFour,ArthurAndersenovercomethem,companiesareabletosuccessfullymanagecostsforthefuture."ArthurAndersen'sAdvancedCostManagementservicesarepartofitsBusinessConsultingpractice,whichassistsmid-andlarge-sizedcompaniesinimprovingtheirbusinessprocessesandtechnologiesthroughspecializationinoperationalandorganizationalimprovement,performancemeasurementandmiddle-markettechnologyimplementationservices.ArthurAndersenprovidescreativesolutionsforitsclientsthroughaudit,tax,businessadvisoryandspecialtyconsultingservices.Itsprofessionalscombineextensivetechnicalcompetenceandindustryexperiencewithinnovativeandprogressivethought,enablingArthurAndersentoexceedclientexpectations.ArthurAndersenisapartofTheArthurAndersenWorldwideOrganization(AAWO),theworld'slargestprofessionalserviceprovider.Withmorethan82,000personnelinmorethan72countries,itsglobalpracticeisconductedbymemberfirmsin361locations.ArthurAndersen&Co.SCisthecoordinatingentityofAAWO.###
