What is the difference between responsible cost management and traditional cost management?

Responsible cost management and traditional cost management comparison:

1, traditional cost management focuses on the management of "things", responsible cost management focuses on the management of "people", pay attention to the incentives and guidance for people, through the correct guidance, so that they are conducive to The correct guidance to make them develop in the direction favorable to the completion of the enterprise goal. Through the strict division of responsibilities and rights, signing responsibility cost contracts at all levels, every expenditure of the project and the economic interests of the workers, prompting the workers to play the subjective initiative, and actively explore new technologies, new methods, increase efficiency and reduce consumption, increase personal income at the same time, but also improve the economic efficiency of the enterprise.

2, the traditional cost management approach is biased towards subjective judgment, responsible cost management based on scientific and reasonable measurement and analysis, more effective and operable. Such as railroad construction enterprises, the implementation of responsible cost management for three levels of scientific calculations. First of all, the project won the bid using the "reverse method" to determine the target cost, that is, the winning bid price - the upper management fee - taxes - target profit = target cost. Company leaders to determine the target cost, in order to achieve the profit target of the entire project and the responsibility of cost control in mind, which is the basis for good management of the responsibility of the cost. Secondly, the use of "shun push method" to determine the responsibility of cost, through the actual inspection of the construction project, combined with the work, materials, machinery and other costs of the market price, with reference to the target cost has been set, according to the principle of the average advanced level of the market to formulate a "jump a pop on the ability to get to the "Project responsibility budget, and its decomposition to the responsibility of the control center, to become the implementation of each department, each team, each head of the responsibility of the cost. In the actual work if the conditions have changed, the corresponding responsibility budget and responsibility cost should also make reasonable adjustments to ensure its effectiveness. Finally, regular comparison of the actual cost of each responsibility center and the responsibility cost, the savings over the strict implementation of awards and penalties, and also to make a detailed analysis of the data, so as to build on the strengths and avoid the shortcomings, and constantly improve the level of cost management.

3, responsible cost management has changed the old management mode, updated the management concept. Requirements for the project beforehand prediction, control, analysis of the whole process of all-round management, responsibility indicators refined quantitative, to ensure that the scientific and rational nature of enterprise management; responsible cost management breaks the dormant for many years of egalitarian distribution system, improve the enthusiasm of the staff, really stimulate the staff's sense of ownership, and promote the means of construction and the improvement of the construction process, and promote the progress of science and technology of enterprises Has a positive significance, is to promote state-owned enterprises from labor-intensive to technology-intensive transformation of effective measures.

Responsible cost management is the direct occurrence of costs and expenses of the production units and business units, divided into a number of responsibility centers, and then according to the scope of responsibility of the center, based on a unified approach to the preparation of the center's responsibility for the preparation of the budget, and to take the form of a contract in the form of contracting the management method by level.

Superficially, the project's responsible cost management is based on the provisions and formats to complete the project's hard and soft elements through repeated optimization fixed, and then calculate the minimum total cost of completing the project, and as a total goal and then the decomposition of the target, the division of responsibility and rewards and penalties agreed to, and ultimately to achieve the two ensures. First, to ensure that the project's activities throughout the process of the cost to control the total cost of the range, and through the responsibility of locking the responsibility to achieve profits. The second is to ensure that the difference between the total income and total expenditure to the full amount of the enterprise, the enterprise and then according to a certain percentage of prior agreement to return to the project, the project according to the contribution of the distribution to the responsible person. Responsible cost management is the process of activities around such a working idea.

Measuring the cost of a project responsibility is good or bad standard is the enterprise's real rate of return and return corresponding to the personal return of the responsible person. Responsible cost management is to improve the project's rate of return, the essence is the integration of open-source and cost-saving, control cost expenditures is responsible cost management, amplify the income is also responsible cost management.