The Institute of Certified Management Accountants of Sri Lanka last week signed a Memorandum of Understanding (MOU) with the Confederation of Indian Industry (CII)’s Total Cost Management (TCM) division to introduce the world’s first ever “Total Cost Management Maturity Model” practice to Sri Lanka.

The new costing philosophy is developed based on the CMM-I system used in IT industry and is created after considerable study with experts of the domain. TCM has 5 stages of advancements called as “stages of maturity”-Minimal, Functional, Operational, TCM Enabled & Exemplary. TCM adopters’ ultimate goal is the ‘Exemplary’ level.

Speaking at the ceremony to mark the signing of the agreement, Minister of Industries, Rishad Bathiudeen advocated that it is time Sri Lankan industries adopt stronger cost controls across the board as accurate identification of their costs is essential for them to face both local and global competition.

“Today, a large section of the local industries catering to the local and export markets are facing many challenges in costing and pricing of products and meeting the competition as a result. The apparel Industry which is the largest industrial export from Sri Lanka has faced competition from low cost supplier countries and some global buyers have switched to these low cost suppliers. TCM could help to control overall costs thereby streamlining total costs and overcoming costing challenges. Another example is that the challenges to our own industry sector competitiveness. In fact, rising costs have become a big challenge to our industry competitiveness and Sri Lanka’s fluctuating Global Competitiveness Report score clearly indicates the impact of this issue,” the Minister said.

Joining the session were Chennai based Head of CII-TCM Division K V Mahidhar, President of CMA Sri Lanka Prof. Lakshman R. Watawala, First Secretary, Economic & Commercial of High Commission of India to Sri Lanka Kartik Pande and accounting  professionals from Lankan corporate & public sectors.

In the 2014-2015 Global Competitiveness Report, Sri Lanka slipped by eight places but in 2015-2016 report Sri Lanka moved up by 5 positions to 68 (from 140 countries assessed).