Total Cost Management
The term Ingegneria Economica, which is a substantial and qualifying element of the italian name of the association, was coined in 1987 as an evolution of the term Cost Engineering.
In the same period also the term Total Cost Management (TCM for short) was coined: this term is mainly used in the international arena among the organizations belonging all'ICEC (International Cost Engineering Council), organization to which AICE belongs.
In the story, the definitions of these terms have evolved up to reach very complex representations, especially in the early 2000s. Since the beginning, however, the basic idea was to identify the Ingegneria Economica as the meeting point of different and complementary worlds related to engineering and economics, in order to capture in depth the concept of inter-relationships existing in real life between the phenomena studied by these two disciplines.
The italian term Ingegneria Economica (which we can roughly translate as "economics for engineering") was introduced in 1987 and is used in Italy as an extension of Cost Engineeering with the aim to promote a more systematic and integrated approach to the management of the costs associated to any engineering activity.
Actually, the Ingegneria Economica is a discipline whose scope and primary interest is represented by the relationships between technical and organizational aspects and facts and their connections to economical and financial manifestations.
Total Cost Management is the systematic methodological approach to effectively and efficiently manage the relationships between technical and organizational aspects and facts and their connections to economical and financial manifestations.
Even if it is neither possible, not valuable, to translate in Italian the term Total Cost Management, it is certainly useful to give an accurate connotation of its three components:
- TOTAL
It is associated to a proactive and structured approach based on an extensive involvement of all functions at all levels (Strategic, Tactical and Operational) specifically tailored for each type of organization - COST
Represents all the economic resources needed to create value for an organization and its stakeholders - MANAGEMENT
It is the systematic use of methods and techniques to Plan, Do, Check and Assess (PDCA) and their effective application to each phase of the Life Cycle of a business, product, asset, project or process aiming to minimize the costs and maximize the value (profitability)
The Body of Competence is shown in the tables below. It is organized into four main groups:
- Group 1: Basic Elements
Basic theoretical knowledge needed to understand and use professional practices - Group 2: Context Factors (Life Cycle Management)
Knowledgs necessary to understand different organizational contexts - Group 3: Creating Value
Where and how optimize the relationship between cost and value - Group 4: Applications
The core of the BoC, covers all applied practices of Total Cost Management.
Download here the PDF version: pdf Body of Competence - rev. 0 (English) (190 KB) .
The selection of publications listed in the following table has been proposed as the bibliography of reference for the Body of knowledge. It includes all the documents relative to exam preparation.
Up to the Seventies or the Eighties of the last century, Total Cost Management was known and embraced only in large international engineering and construction companies, especially in those industrial sectors (petroleum, petrochemical and energy) where the market conditions obliged it’s application; it should be pointed out that, some Italian societies had already developed advanced global scheduling and controlling systems in the 1970’s.
We have 110 guests and no members online