For an enterprise to achieve long-term competitive advantage, it needs a series of strategic goals and specific objectives to achieve them. The management function of an enterprise is the foundation and guarantee for achieving its goals. The realization of management functions can only be accomplished through the enterprise management organization.
(1) Establish a strategic cost management planning group to conduct strategic cost forecasting and decision-making for the enterprise. Since the realization of cost strategy goals is long-term, the strategic cost goals are broken down into several strategic stages for realization. Each strategic stage has its own stage sub-goals, and plans and budgets are established based on these sub-goals. Establish a strategic cost planning group to be responsible for the overall planning, and to exercise specific control over the basic conditions for cost occurrence, and even to carry out process reengineering. Set up an independent supervisory body under the strategic planning committee to supervise the implementation of cost strategy and goals at each stage to prevent deviation. Next, according to the size of the company and the main links of the value chain, set up strategic cost planning groups or persons in charge for marketing, design, human resources, quality, supply chain, etc., and then set up strategic cost planning groups or persons in charge for each product division and marketing division. The organizational structure of the strategic cost management system is conducive to the divisions to determine their own strategic goals and formulate strategic plans under the company’s overall strategic goals, and to control costs in the main cost control links to ensure the consistency and operability of strategic planning. Finally, each functional department and division should also set a series of specific goals for reducing costs to help implement and control strategic costs.
(2) With the information management system platform as the background, implement a flat management method. Strategic cost management emphasizes timeliness and dynamism, and the corresponding organizational model for implementing strategic cost management must also adapt to dynamism, flexibility and timeliness. However, under the organizational structure of many companies, due to the increase in the level of division of labor and the number of collaborative links, the time for information to be transmitted in the company is prolonged, and the number of unnecessary stay links increases, which to a certain extent leads to information loss and distortion, and at the same time increases the difficulty of information feedback, thereby increasing the cost of errors in enterprise cost control. In order to gain a competitive advantage, companies must restructure the original organizational model from multiple aspects such as resource allocation, management level setting, decision-making procedures and inter-departmental relations. Flat organizational structure is the result of the above changes. It adapts to different requirements of the external environment by changing its internal structure, showing strong adaptability. Indirect control and command brought by informationization and computerization increase the control range, thus making flattening a reality. Dell is a typical example of adopting a flat organizational system in practice. Dell takes “everything for customer service, configuration on demand, direct ordering” as its business philosophy and method, expands and enriches front-line sales and service forces, ensures fast and smooth communication with customers, and improves customer value and customer satisfaction; reduces the middle management level, improves the speed of information transmission and decision-making; advocates senior managers to participate in activities that directly serve customers, and encourages the direct circulation of information among departments and levels to ensure the speed of decision-making and the comprehensiveness of required information and knowledge.
(3) Preset operation processes and authorization coordination between departments to form a unified cost control target strategy Cost management is global, but many companies now set up organizational structures with functions as the center, which often leads to departmentalism. For example, the procurement department focuses on price rather than quality, the production department focuses on cost rather than market, and the marketing department focuses on sales rather than channels, etc. In general, they pay more attention to the short-term interests of their own departments and ignore the overall cost control research objectives of the enterprise. Some departments even believe that cost control is only the management scope of the finance department, and therefore lack a common cost control objective. The organizational structure set up according to the main business process can cross the traditional functional department boundaries, integrate the originally fragmented business processes, reduce unnecessary coordination between departments, and overcome the shortcomings of departmentalism.
According to the business process organizational structure of the enterprise, preset the operation process in the ERP system and make good settings for authorized coordination business. In the process of setting up, we must fully consider the different characteristics of each link of the enterprise’s production and operation, listen carefully to the opinions of basic operators, and conduct scientific simulation and measurement when necessary to make the system operational. Each functional department and personnel shall operate in accordance with the operating procedures and authorization regulations of the ERP system to make their respective responsibilities clear.
(4) Build a strategic cost management evaluation system. The ultimate goal of implementing strategic cost management is to improve the competitive position of the enterprise, which is a manifestation of its competitiveness. Whether the competitive position of the enterprise has been stabilized and improved, after implementing strategic cost control, it is necessary to evaluate the performance of strategic cost management.
Establishing a strategic cost management performance evaluation system and analyzing and evaluating the cost control of each period is an important part of the strategic cost management organizational implementation framework. A complete strategic performance evaluation should focus on all key success factors that affect the business operations of the enterprise, including financial factors and non-financial factors. The balanced scorecard is an effective method for conducting a complete strategic performance evaluation. Among the world’s top 500 companies, about 80% of them use the balanced scorecard system for performance evaluation. It evaluates the strategic performance of the enterprise from the following four key aspects: customer satisfaction, financial performance, internal operating process, learning and growth. Different enterprises and different strategic cost business units, based on comprehensive investigation and analysis, set up specific indicators for strategic performance evaluation according to their own environment and the key factors that determine their own success, and reward or punish accordingly. Through direct attention to these scientific and reasonable evaluation indicators, the strategic cost management performance evaluation system effectively connects performance measurement, evaluation process and corporate strategy.