Assign Clear Personal Responsibility for Each Cost Line to a Single Individual

Assign Clear Personal Responsibility for Each Cost Line to a Single Individual






January 8, 2019

By Doug Hudgeon The Cost Management Tiphudgeon12 As I’ve planned my upcoming tips, I’ve been pondering which tip will be the most important. I now think this is it. You cannot reduce cost in your organisation unless you assign a single person the task of, and regularly hold them to account for, improving each cost line – and if you have to change your chart of accounts to do so then do it. Who you select as the responsible person for each cost line will depend on what you want to accomplish. If your cost reduction programme is urgent and necessary for your corporate survival, you should assign responsibility to a small group within Finance who are solely focussed on taking cost out of your organisation. However, if you are looking to improve operating efficiency as an ongoing practice within your organisation, you should assign responsibility to front line managers. Building a cost conscious culture requires empowering your managers to impact cost and valuing their success at doing so. Your managers must see themselves as personally responsible for cost reduction. Related web sources The bystander effect is well researched social psychology phenomenon. It was first studied following the killing Kitty Genovese in 1964 where her neighbours failed to intervene in her murder because they thought that someone else would. Whist this interpretation of that incident is probably flawed, you don’t want your company to die because your managers were all bystanders. Doug Hudgeon who is lawyer and vendor management professional who has branched into finance and accounting shared services management.

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  • Nothing in this world is free; especially in project management. A manager has to watch the project cost carefully to stay within budget, but he also has to make sure there are enough hours available to deliver good results.

    I’m adapting this key point as manager to keep reducing the project cost:
    “Choosing Right People is Key to Managing Costs”

    Not everyone is right for every task. Even though you try to hire well-rounded team members, there will always be areas where one outperforms the rest. Know your team’s strengths and weaknesses. Be familiar with their work habits and attitudes, so that you can accurately predict how long it will take someone to do a particular task.

    This doesn’t just apply to saving on project costs, either. If you find that you’ve got extra hours, you might be able to assign a task to a newer team member as a learning experience. It’ll take a bit longer, but you’ll have given him valuable on-the-job training.

  • I totally agree with Doug Hudgeon as he is Head of Global Supplier Network of (Marketboomer) He has over 15 years managing teams in Australia

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