Cost Management System
Definition
Systems and methods for enterprise cost control and management.
Historical Background
1990s: cost management systems enabled fine-grained control.
Example
Every link from procurement to sales must control costs. Like a financial steward.
Formula
Cost Reduction Rate = (Previous Cost - Current Cost) / Previous Cost x 100%
Core Concepts
Profit improvement guarantee: systematic cost management for continuous reduction.
Extended Applications
Budgeting: forecasting, planning; control: standards, variance analysis; accounting: allocation; analysis: composition, drivers; assessment: accountability, performance.