Sri Lankan businesses waste 4% a year, study shows
View(s):Sri Lankan organisations wasted an average amount of 4 per cent of revenue every year with projects being cancelled after their inception, delayed projects and overpaying for goods and services being the main causes, a new study by the Chartered Institute of Management Accountants (CIMA) shows. Proving that there is a gap between expectation and reality, 80 per cent of respondents believed that promoting a cost conscious culture was the responsibility of their executive team. But in stark contrast, the results revealed that only 27 per cent have a board member tasked with maintaining cost competitiveness.
“Looking at the lack of encouragement within Sri Lankan organisations to change bad habits, 21 per cent of respondents claimed that employee incentives are poorly designed to encourage cost control; 12 per cent believing cost containment strategies are ineffective. A further 21 per cent think that technology and data analytics are poorly used within their organisations,” the study, with brief details in a CIMA media release, reported. CIMA polled more than 2,000 finance professionals, of which 59 per cent admitted their organisations lack any kind of strategy to drive cost competitiveness.
A further 48 per cent of respondents claimed there is little to no mandate within their organisations to drive down costs when making day-to-day decisions. Peter Spence, CIMA’s head of performance management research said: “The balancing of short- and long-term objectives requires the engagement of management accountants, who have a keen understanding of the drivers of cost, risk and value across the organisation’s value chain. CIMA members have never been more relevant in ensuring sustainable success in today’s volatile business world, where there is uncertainty around every corner.”