Army resource management: increasing the focus on cost analysis to support resource-informed decision making: now more than ever, limited resources challenge financial managers to analyze costs and benefits before making resource management decisions. To meet this need, the Army is placing increased emphasis on cost analysis initiatives.

Noting clear indicators that a significant decrease in Army resources is on the horizon, the Army's senior leaders recognize the compelling need to make better use of those [DOUBT]resources. To meet this need, the Army is placing [DOUBT] on cost analysis initiatives. this article [DOUBT] Army is employing to support resource [DOUBT]

What Is the "Right Way to Think About Cost?

The primary task for many resource [DOUBT] stallation or unit level, is to perform budget [DOUBT]embrace all the actions required to develop the budget and justify the request, and oversee the spending of the funds during the year of execution. Quite naturally, this requires that the resource manager have a budget view of resources as opposed to a cost view.

The difference between the two perspectives can be significant. In most cases, the budget perspective on resources has a focus that is near-term and local; the cost perspective takes a long-term or life-cycle view of costs and considers all costs, not just those that are incurred at the local level.

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For example, if the Army decides to activate a new unit with a new weapon system at an installation, the installation's resource manager will ensure that the budget includes funding to cover the costs that will be paid locally, such as the costs to operate and maintain the weapon system and to pay for the civilian personnel who will support the Soldiers and their families. In this budget view, the resource manager would not consider the pay and allowances for the Soldiers or the cost of buying the weapon system and supporting it throughout its life cycle. This is because those costs are not part of the local budget and do not affect decisions that have to be made at the installation.

Conversely, when Army leaders are deliberating over whether to activate the new unit or field the new weapon system in the first place, a cost perspective is essential. Decision makers need an analysis that takes into account all costs, to include costs that will be incurred locally in the near term, development and acquisition costs, pay and allowances for the Soldiers who are added to the force structure, additional training requirements, and the cost of operating and supporting the unit and the weapon system over the long term. By placing increased emphasis on cost-benefit analysis, the Army wants to ensure that all leaders and managers …