Importance of CMS

Meeting the long-run objective, survival, depends on acquiring the right inputs from the right suppliers, selling the right mix of products to the right customers, and using the most appropriate channels of distribution. These decisions require only periodic information that is reasonably accurate. Long-run information requirements are often described as relating to strategic management.

The information generated from the CMS should benefit all functional areas of the entity. Thus, the system should integrate the areas should “improve the quality, content, relevance, and timing of cost information that managers use for short-term and long-term decision making.”

The  organization must make  efficient  use  of  its  resources  relative  to  the  revenues  that  are  generated.  Specific  cost  information  is needed and must be delivered in a timely fashion to an individual who is in a position to influence the cost. Short-run information requirements are often described as relating to operational management.