The far more competitive environment has profound implications for cost management systems. The knowledge of product costs, cost control and performance measurement are more important than they have been in the past.

Three major factors are causing changes in management accounting today: shift from a manufacturing-based to a service-based economy, the increase of the global competition and advances in technology.

Traditional cost accounting systems have tended to focus only on the production phase and do not pay attention to the product’s life cycle costs. It must take a close look at the company’s entire value chain, because this can help managers to identify opportunities for cost reduction.

environment, competitiveness, competition, costs, management accounting