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A briefing report on Cost Management Systems within the SEG Ltd group and how it might be used to improve the Group.

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Introduction

F108MAN - Managing Products and Finance? Assignment 1 0600532 Strathgammon Estates Group (SEG) Ltd Cost Management Systems (CMS) A briefing report on Cost Management Systems within the SEG Ltd group and how it might be used to improve the Group. For: SEG Ltd 8 January 2013 By: Stephen Redfearn Personal Assistant Chief Executive Secretaries Dept. SEG Ltd Contents 1.00 Introduction 2.00 Cost Management Systems 3.00 Management Advantages 4.00 Management Issues 5.00 Conclusions 6.00 Recommendations 7.00 Appendices 1.00 INTRODUCTION 1. The report is required to recognise key decisions and factors that contribute to any inefficiency of the current CMS within the SEG Ltd and investigate how cost management systems which are advantageous to improve the business efficiency by providing better clarity to the SEG Ltd Board. 1. I will provide a summary to the Board of the evaluation results. It will provide recommendations on improvements that can be made through new or improved Cost management systems in order to drive efficiencies throughout the business. 1. This report will look to address if there are problems of using traditional the CMS with the aim of generating greater competitiveness, business efficiency and result in growth on a continuing basis throughout SEG Ltd. 1. With looking into the structure of SEG Ltd, there appears to be no reason why newer Cost Management systems could not be implemented across the group. ...read more.

Middle

1. Business decision making can be improved by utilising Cost Management in the decision-making process. Instead of decisions being made solely by qualitative analysis, the managers or the board can use this information as a decision making tool. 1. Cost management systems can be used to increase company?s potential financial returns. Financial forecasting which relates to demand, sales or the effects of price changes in the economic market can be taken into account. 1. The information can be used to ensure enough goods or services are being produced in order to meet the demands of customers at current pricing structures. 4.0 Management Problems 1. The traditional practices used at SEG Ltd means there is limited or poor quality information available for management to make decisions. This has resulted in limited support or acknowledgement by the senior management of the available Cost Management Systems (CMS) that can be used. 1. When techniques for estimating are poor this will lead to insufficient results. 1. When starting and finishing of projects are not in sequence then this can lead to the Cost management system not being kept up to date or being able to be fully utilised. 1. If the work breakdown structure is inadequate and when any technical problems that cannot be foreseen. ...read more.

Conclusion

By introducing a CMS package across several departments this would benefit the planning of labour and resource to be more effective, by minimising wasted man hours and therefore saving money. The Quantity Surveying team could use it to work out project durations and associated costs. Cost management software varies greatly and the need to understand what is required from the software and how it is used is the primary consideration for the cost management software. Numerous tools can exist in the software package and be designed to track projected costs against actual costs. Prior to and following the implementation of the new systems there will need to be an intensive training programme devised to ensure that all staff are aware of how the new systems operate, and how they can benefit each individual in their workplace. The installation of new CMS in any business is always a huge financial commitment and return on investment will be a consideration. However, the benefits in my recommendations should assure you of the longer term efficiencies the systems will provide, and the potential for streamlining the business once the systems are fully operational. A reduction in headcount would pay back the initial outlay within two years. A consultancy specialising in CMS should be appointed to audit all departments to understand processes and working practices before specifying a package for implementation. The package should consider expandability, adaptability, flexibility and on-going maintenance and support before any final decision is made. 7. ...read more.

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