COST MANAGEMENT

Cost Management Specialists, a member of the Blue Chip Consulting Group define cost management as managing cost, including people, as an investment in customer value at a price that reflects profitable business.

1. Investment in Revenue
2. Delivery of customer VALUE
3. Profitable business

Blue Chip Consulting Group appreciates the significant distinction between measurement and management of cost.

Cost Management Specialists

1. use two key drivers in assisting organisations embrace cost management.

"Researchers claim most organisations have a minimum of 30% waste in their cost structure, yet typically accountants have not seen waste elimination as a major source of profit improvement"
Jim Rigby Hewlett Packard 1994

"Research suggests that up to 70% of customers are not profitable at all. And what's more surprising is that it is often the larger customers who represent the biggest losses."
Transforming the Bottom Line - Measuring By Real Numbers,
Hope T & Nichols J, 1995

2. pursue cost management through a revenue focus based on four revenue streams:


1. Revenue Received
2. Revenue Lost
3. Revenue Foregone
4. Escape Revenue

The significant cost management challenge is to convert Streams 2, 3, & 4 into Revenue Received.
Cost Management Specialists use a variety of tools and techniques to achieve cost management far beyond the simple measurement of cost. We invite you to visit:

http://www.costms.com.au

"A cynic knows the cost of everything and the value of nothing,"
Oscar Wilde