The focus of the article Cost Management - Winning the Cost War by Scott H. Graham is to emphasize the importance of cost management. Throughout the article, the emphasis is on ABC (activity based costing) and its importance in being able to both track what is happening within the organization and ways to predict how costs can be cut while existing services maintained. The organization referred to within the article is the U.S. Army and the specific site where improvements have been made is Fort Huachuca. Emphasis is placed on maintaining a pro-active management style (the assumption is that the Department of Defense is continually cutting, rather than increasing, budget allocations for the Army).
One of the faults most commonly referred to by the article within organizations is spending whatever is allocated in the budget, no matter whether those monies help the current organization move forward or not. In order to combat this trend, the Graham recommends that organizations review their departmental budgets quarterly and plug in the actual monies used.
Since all expenditures are not spent equally throughout the year, it is also recommended that some items be averaged so as to reflect how the budget will look by fiscal year's end. In making these calculations, data from all areas of the organization are used (95 services in the case of an Army base). A chart is provided that includes not only all areas, but what budget items must be tracked.
The conclusion of the author is that if proper cost management is accomplished by an organization, the level of services can remain constant even if actual monies spent within the organization decrease. The organization I will be referring to as a comparison is UTI/MMI, a private vocational/technical school with multiple divisions and campuses (there is some duplication...