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In Search Of Cost Competency
Book Review
The book titled 'In Search of Cost Competency' is a research compendium authored by CMA Dr. Sreehari Chava. The compendium is an innovative contribution by the author to present the cost competency modules to the Indian small entrepreneurs.
The author shares that he has always been fascinated by the Birla acumen, Tata vision and the SME potential. He adds that if a cost accountant can translate the Birla acumen and Tata vision for an effective positioning by the SMEs, Indian SMEs can poise for a fantastic competitive edge. He suggests that what is needed could be a proper navigator in the form of a professional cost manager who can add the competency punch to the ever striving enterprising folks.
The term 'Cost Competency' is devised to denote the Competitive Cost Edge that an enterprise acquires over its competitors through prudent deployment and utilisation of the available resources. The impact of Cost Competency is stated to reflect in the superior outcome achieved by the enterprise over its peer competitors over a period of time. The Cost Competency module of an enterprise is reported to include the strata of Revenue Management that enables Revenue Augmentation; Cost Containment that leads to Cost Leadership; Resource Utilisation that facilitates the Yield Maximisation; and all together culminating in a Competitive Edge that repositions the entity over its competitors. The competency momentum is slated to begin with Cost Management and the strides would be towards the Cost Competency. A Cost Manager is visualised to play the role of a Friend, Philosopher and Guide in the entire exercise of Cost Competency Enablement.
The author advocates the following Cost Tips as Cost Competency Enablers:
1 Adopt ABCM as a Way of Life: The entrepreneurs should adopt the principles of Activity Based Cost Management as a way of life. Size of the enterprise does not matter; but timely controls can lead to a lot of value addition.
2 Target the Conversion Cost: Target Costing is a way of thinking. Target Costing facilitates identification and quantification of internal elements that need to be contained and controlled.
3 Reap the Yield and Rope the Profits: Every entity that fits into the yield competency matrix can be tuned for revenue augmentation through Yield Management.
4 Lean is the Means: Lean Management shall be perceived as a means of Cost Reduction.
5 Encash the Experience: Experience propels economies of scale.
6 Enable the Evaluations: Financial Performance Index is a comprehensive tool that can be adopted by every enterprise to track its own performance from various related perspectives.
7 Stakeholder is the King: Every stakeholder is a king in disguise; Stakeholder Equilibrium is the key for survival.
8 Other Income is the Order: Other Income has, now, taken the shape of an important source of revenue.
The author has demonstrated the utility of the above concepts by means of narrative discussions, examples, case studies, and short stories. Not filled with heavy, jargonized concepts, the author demonstrates the important aspects of Cost Management in business by citing relevant and current cases so as to keep the reader involved. He draws reference to contemporary concepts and technologies which help the reader identify with what is being spoken about and also to understand how to make it relevant to his or her own frame of reference. The author sends a message that Indian SMEs, empowered by a Unique Cost Competency could be one viable means for turning around the Indian Rupee!
The book could be a good learning for Every Aspiring Entrepreneur, particularly those of the SME sector; Managers; Researchers; Academicians; Students of Cost Management courses; Planners; etc.; and also serves as a very good reference to be preserved by the libraries.
Prof. Ashwini Purohit
Assistant Director
Shantiniketan Business School
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