 | ||
Total Cost Management (TCM) Maturity Model ® is a Cost Management assessment program that is conceptualized, designed and marketed by Confederation of Indian Industry (CII).This model, first of its kind in the world with IPR (Intellectual Property Right), can be used to guide cost leadership across a business unit or an entire organisation. TCM Maturity Model ® defines five maturity levels to grade organisation’s cost management system on a hierarchy.
Contents
Overview
TCM Maturity Model ® was developed by CII TCM working group, which consists of experts and professional drawn from across diverse industry segments.
It aims to provide seamless link between overall business strategy, business model and cost management system of the organisation. TCM Maturity Model ® addresses four areas of interest:
a) Strategic Focus
b) Futuristic Focus
c) Operational Focus
d) Accounting & Analytical
TCM Maturity Model ® Framework
TCM Maturity Model ® can be viewed as a set of structured levels that describe how well the cost management of an organization can reliably and sustainably produce required outcomes. It can be used as a benchmark for comparison and as an aid to understanding.
TCM Maturity Model ® defines, measures, assesses and reports cost maturity of organisations in five hierarchical levels:
1) Minimal
2) Functional
3) Operational
4) TCM Enabled
5) Exemplary
Levels of Maturity
Level 1: Minimal – At this level, cost awareness is only at senior management level. Organisation is financial report driven and it is inadequate for managerial reporting and control
Level 2: Functional – Information technology is interfaced and system driven data support is available at this level
Level 3: Operational –Effective utilization of cost data for improvements and operational support for budget is available
Level 4: TCM Enabled – At this level, there is integrated cost system is in place, ERP solution provides total solution for cost management requirement
Level 5: Exemplary – Internal system is designed to minimize and absorb both national and global uncertainties at this level
Assessment
Depending on the assessment, the organisation can be awarded a maturity level rating (1-5). Many organisations find value in measuring their progress by conducting this certification. They are typically conducted for:
a) Diagnostic process study – Measure efficacy of the process in which existing cost management system is looked at
b) Enhancing efficiency and effectiveness of value chain
c) Developing roadmap for moving forward in the hierarchy
More than 60 organisations from diverse sectors have been assessed, some of them include Automotive, FMCG, Packaging, Engineering, Infrastructure and Sugar industry.
Recognition
TCM Maturity Model ® received accolades from luminaries from CAM - I (USA); CMA (Canada); ICMA (Sri Lanka) & IFAC – PAIB.
Dr Robert Kaplan, Co-creator of Balance Scorecard & Emeritus Professor at Harvard Business School, has also elicited his views on the model.