Inactivity Based Cost Management

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About the author:
Jayaraman Rajah Iyer is a Chartered Accountant from ICAI, New Delhi (1966) who has a unique insight into major changes in accounting in India's history culled from experience with major firms across the globe. This book is the outcome of several years of practical knowledge on Governance extracted from 1966 when Govt. of India introduced Cost Audit System for Vegetable Oils that every manufacturing company would go to the government for a small increase in prices of their products every fortnight. The system continues even now for several commodities including Medicine. The impact on cost accounting methodology adopted is unique and known to India for long.

In 1972 as Forestry Operations Accountant for Wimco, subsidiary of the Swedish Match Company, Jayaraman acquired an in-depth knowledge of forest terrains and realized a discrepancy between the accounting year for WIMCO (Jan. to Dec) and the forestry season (Sep. to March). This made it difficult to estimate cost for wood sent to the factories. This prompted him to institute a system called Likely Ultimate Cost to achieve a balanced figure through the year without overloading a cost figure at the end. It necessitated estimating cost constantly a year ahead.

In the course of his duty in WIMCO, as per the case study detailed in the book, Jayaraman was called upon to play whistle-blower to corrupt practices. He says "An Accountant is the trustee of the public wherever he/she is employed. The personal case study reported in this book is not to be construed as whistle-blowing but performing one's duty. An Accountant undertakes social responsibility quietly fighting for justice where 'matsyanyaya' is prevalent. Matsya means fish and nyaya justice, where the big fish swallows the small one." Jayaraman went through subsequent inquiries at great personal cost to be vindicated in his stand against corruption. His joining the Wellcome Foundation, UK, later remains possibly the only HR case study when he joined a company despite a written negative reference from the previous employer specifically imploring the new employer not to appoint him.

It was in 2001, called upon to prepare a normal ROI for an investment in a major ERP package that Jayaraman drafted a unique methodology - RoI based on intangible, covering the entire spectrum of usage of an ERP package and its capability rather than submitting to the futility of its usage, hovering around 8% for almost all highly priced ERPs, based on cash-flow.

These three major areas of experience form the fulcrum of Governance as set by the book: 1. Real-time Monitoring, 2. Cost Consequence and 3. People Participation.

Inactivity Based Cost Management
 

Measurement of Intangible: Governance, Ethical & Fiscal Responsibility and Accountability

Authored by Mr. Jayaraman/J Rajah/R Iyer

Inactivity Based Cost Management [IBCM]©

The theme of the book is: Activity is a Cost Incidence whereas Inactivity a Cost Consequence. You will notice that cost consequence is relevant for only one day, i.e. to-day and as a corollary Governance is feasible for only one day, i.e. to-day, neither by the dateless past nor of the infinite future.

Do you run a Government, a Corporate, a Financial Institution, a Regulatory Body, invest funds as PE or stakeholder or project manager, or the all powerful voter? So long you are not under the shackles of a tuppence of an ideology bereft of any human dignity called Communism, are you not interested to know how they measure up to your expectations of fiscal responsibility, by instituting Article 10 of UNCAC? IBCM gives you what Galileo said - Measure what is measurable, and make measurable what is not so. Measure Governance and use it as a tool of profits as well a watchdog.


Publication Date:
2010-11-10
ISBN/EAN13:
1453856706 / 9781453856703
Page Count:
262
Binding Type:
US Trade Paper
Trim Size:
6" x 9"
Language:
English
Color:
Black and White
Related Categories:
Business & Economics / Government & Business




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