Microfinance Focus, January 5, 2012: The 3rd International Conference on Institutional and Technological Environment for Microfinance (ITEM3) kicks off in New Delhi today. Organized by the Burgundy School of Business at the International Habitat, the conference is themed ‘Cost Management & Social Performance in Microfinance’.

The conference opened with a workshop on innovations in cost management presented by Mr. Paul Sharman, Editor-in-Chief of the Thomson Reuters journal “Cost Management” and Mr. A.S. Durga Prasad, central council member of the ICWAI (The Institute of Costs and Works Accountants of India)

During the workshop, Mr. Paul Sharman traced the historical evolution of Cost Management techniques from the initial attempts at direct costing, and the change to overhead allocation with basic notions graduating to activity based costing and then further evolving into time driven activity based costing systems, and today, with increasing power availability of computing technology, advances of integrated costing and planning based on simulation models which could then compare alternative strategies.

Mr. Sharman, who is a strategy consultant with Focused Management, explained the importance of embedding cost management in the process management which itself needs to be part of the overall strategy of the organization. Techniques such as the Balanced Scorecard provide the necessary balance between the stakeholder interests. For double bottom line organizations, the profit component of the balanced scorecard needs to be replaced by “value”.

Mr. Durga Prasad presented three case studies on how cost management could interplay with technology in changing the productivity and efficiency of organizations, including CISCO, Lenovo and an Indian organization. He explained millions of dollars could be saved by simple cost management techniques of following and analyzing critical expenses, with a bare minimum of centralized staff.

He also explained that technology today, especially hand held technology and smart cards could revolutionize business processes and these could be readily applied by the microfinance sector.

The main conference on microfinance starts today and will be inaugurated by Dr. Stéphan Bourcieu, dean of the Burgundy School of Business in France, Mr.Paul Sharman, Editor of Cost Management, Mr. M. Gopalakrishnan, President of ICWAI, Mr. N.V. Krishna, an IT specialist and a social entrepreneur and Dr. Arvind Ashta who holds the Banque Populaire Chair in Microfinance at the Burgundy School of Business.

Key interventions are being presented by NABARD and field visits are organized by Deepalaya, a NGO in Northern India promoting the integrated livelihood model including microfinance. Academics from all over the world will participate in this conference.

Microfinance Focus will be active in providing selected excerpts of this conference.