“ZBB is a disruptive way of challenging cost positions.
It sets new priorities and delivers immediate impact.”
Once cost transparency has been established, procurement and a cross-functional team commit to savings targets based on external and internal benchmarking. After targets have been signed-off, they are rigorously implemented. Zero Based Budgeting is a disruptive method that challenges the status quo and is an effective way of ‘shaking things up.’ With top management support, close collaboration between procurement, operational functions, and finance, Zero-Based Budgeting has proven successful in accelerating savings implementations and generating P&L impact. With this, Zero-based consumption culture with ZBB will only become more prevalent.
In a recent example, one of our clients set a target of cutting its travel budget and reducing its environmental impact through the initiative ‘Green October.’ It involved restricting internal travel in October by encouraging employees to host meetings via video and approving travel only by exception. The top management led this initiative, and various communication channels helped to reinforce its importance internally. Not only did ‘Green October’ reduce the environmental footprint of our client, but it also cut travel costs by 20% in October.