Identify and describe the major differences between the traditional approach to cost control and modern cost management.

The major differences between traditional approaches to cost control and modern cost management are:
Drivers of costs. Under the traditional approach, managers control costs by bringing them into line with some predetermined goal, such as budgeted or standard costs. The focus is on cost outcomes. Cost management reduces costs by identifying wasted resources and eliminating this waste through identifying the factors that really drive costs.
Strategic perspective. The primary focus of traditional approaches is on controlling costs within the organisation-an internal perspective. Modern cost management is also concerned with achieving value for the customer-a strategic perspective.
Process perspective. Traditional systems tend to control costs by reporting results for responsibility centres based on functional areas of the business, such as production, marketing and administration. Modern cost management recognises that customers' needs are met by processes, which flow across the business and may cross functional areas.