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Cost Matters: How to Manage without Budgets, and help Lean and Agile Fly (PDF)

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One of the most enduring myths in the field of financial management is that budgets are essential to be able to control costs. 


This book directly attacks this myth demonstrating how such traditional practice increase and lock in costs. Furthermore, rather than being a reckless and naïve experiment Beyond Budgeting can help manage costs much more effectively.


In a simple and direct way, combining text and pictures in series of bite sized modules, this book explains why and how traditional approaches like budgeting, responsibility accounting and detailed costing fail and how Beyond Budgeting does a much better job. 


This book is primarily aimed at practitioners in finance and assumes familiarity with a range of concepts and practices.  However, business leaders of businesses and change leaders frustrated with the bureaucracy and constricted mindset associated with traditional approaches to cost control will find this book an illuminating breath of fresh air.


One of the reasons why Beyond Budgeting is more effective is that it is much better aligned philosophically and practically with other management innovations that have a proven record of success in organising work processes.


Over the last few decades businesses have learned to use Lean concepts to make their productive processes more responsive and efficient. And Agile approaches have helped them manage innovation and change more effectively, faced with a climate of uncertainty.


But while we have new, better ways to manage the practice of work itself the mechanisms used to manage the associated costs using rigid detailed annual budgets have changed very little in a century. 


This book describes how to manage costs without budgets and all the other bureaucratic paraphernalia of the past. The result is a holistic approach to managing work that helps unleash the power of Lean and


It is organised around 5 modules:

Module 1: FOUNDATIONS introduces the basic concepts upon which the book is based

Module 2: THE EXISTING STRUCTURE diagnoses problems associated with traditional cost management practices.

Module 3: PROCESSES AND ACCOUNTING FOR WORK describes new ways of helping to manage the costs associated with continuous work processes

Module 4: DECISION MAKING AND THE ALLOCATION OF DISCRETIONARY RESOURCE sets out how to manage costs associated with discrete decisions typically conceived of as projects. Notable it introduces a radical new way of dealing with uncertainty.

Module 5: PEOPLE explains the implications fo these new approaches for managing people

In addition there is an appendix providing more detail onset of the techniques introduced in the body of the book.

Note that a purchase generates a unique watermarked PDF file and cannot not be shared without the authors permission.

About the Author

Steve Morlidge has been involved with Beyond Budgeting since its inception in 1998. As Controller of one of Unilever's largest subsidiaries he was one of the original sponsors and he subsequently led a Beyond Budgeting change project for the whole enterprise.

He is the author of six books on Beyond Budgeting related topics and completed a PhD exploring the links between Beyond Budgeting and systems theory. He is a visiting Professor at BBP University and a visiting fellow at Cranfield University.

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You will get a PDF (27MB) file