STRATEGIC COST MANAGEMENT (SCM) – OVERVIEW
Organizations are under considerable pressure to reduce expenditure often when a crisis presents itself, most of which take a short-term view that ultimately has damaging effects long term. For cost management to be effective it must be strategic and aligned with company goals, as past research has shown that reactive cost-cutting and business restructuring proved little to reduce total expenditure or improve the bottom line, in some cases expenditure increased.
By focusing on developing comprehensive and effective strategic cost management initiatives tied in with revenue enhancement will benefit your company. This will require a change in mindset away from short-termism and the emphasis should be on following an integrated approach to strategic cost management and revenue enhancement.
What we offer:
Activity Based Costing and Management – Without having a clear view of your organization’s activities, interdependencies and cost materiality, cost cutting exercises can prove to be counterproductive. With the application Activity Based Management your organization can link costs to strategy, understand the opportunities of cost and profitable mix, we can assist with the implementation of this program and if need be ongoing management thereof.
Target Costing and Product lifecycle management – By determining the lifecycle cost at which your company must produce a proposed product with specified functionality and quality of the product is to be profitable at anticipated selling price levels. Target Costing aids in the process of bridging the gap between planned selling price and desired profit margin.
Breakeven analysis – Provides vital information on the implementation of strategic cost management as it quantifies the business risk and exposure a company faces in economically strained periods.