Proposal of methodology for improvement of costing in the Serbian defense organization

Abstract

Costings are absolutely essential to the efficient operation of any defense organization and an immediate effort should be undertaken in Serbian MoD to determine if the current models produce usable costing data, and if not, that effort should be discontinued immediately. This paper outlines a simpler and effective means to developing costing models. Based on this paper the requirements of the Serbian defense organization to adopt effective costing capability models could be as follows: decision by senior defense leadership to develop and implement basic costing models based on Western best practices using Excel as the basic vehicle on which the models are to be developed; decision by senior defense leadership that such data are inherently unclassified and are to be used throughout the entire defense organization to encourage the efficient use of resources. It is all but impossible to create within an organization a “costing culture” without current cost data made available to all planners and decisions-makers. As such, the results of the costings should be placed on the MoD’s website and made accessible not only to the defense organization, but also the general public as well; decision to review current defense planning procedures to require that all plans are fully costed before they are considered by defense leadership; decision to utilize the results of the full implementation of the operational planning procedures methodology thereby shifting from costings based on platforms, systems, and static units to producing the costings of extent and prospective “capabilities”.

Keywords

• defense organization
• cost
• costing
• cost model
• deployment
• new capability