Devarajan Swaminathan & Co.

Cost Accountants - aligning costs with strategies

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I was invited by the CII - TCM team (Total Cost Management) to participate in the cost management maturity assessment in a renowned company.

I was zapped by the interest, zeal, spirit shown by the company in climbing the cost management maturity level.

At each stage there was extensive debate on the vision, mission, strategy, functions, processes, products breaking it down to the micro level to understand the cost structure and the build up and ways and means of not only cutting or reducing costs but cost management as a culture across the organization structure.

What surprised me most was the willingness, the passion with which "cost", cost structure, cost accounting, cost information system, cost management both at the strategy level and at the operational level was discussed threadbare and appreciated by the employees of the company at various levels all the way up to the management and at the micro level to the shop floor.

Cost is at the hearts and minds of all and I suddenly realized the NEED (which I knew was there) that the Company understands and appreciates to have a cost management model in place and if it is so in this company I am sure it is across all industries. But mind you the thrust was on cost accounting as a cost information system as a decision support system. I had great experience sharing knowledge with other cost accountants in the company who were curious to know why wasn't the ICWAI doing what CII was doing.

The Institute of Cost and Works Accountants of India (ICWAI) needs to put THRUST in this area. If possible tie up with the CII. This is a ready made area of work exclusively for cost accountants and the company accepts and acknowledges that.

If there is any myth that cost management addresses just costs then think again it actually addresses resources, processes, activities, decisions that lead to incurrence of costs and in the process it addresses the entire gamut of business and essentially operations.

I just hope the profession moves to a more participative approach in business models to bring in cost management culture across industries.

Many thanks CII for the invite

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