Zero based budgeting | KPMG | BE
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Zero based budgeting

Zero based budgeting

Zero based budgeting

Cost transparency, a new level of cost conscious behavior, the reallocation of funds and increasing your capacity to deliver the greatest value

‘CFO's need to change the way they approach their budgets. Zero-based budgeting can be a first step in this new direction.’
Xavier Gabriëls, Head Financial Management

 

Rapidly changing business models demand increasingly agile responses, as resources shift to support strategic objectives. The true value of zero based cost management lies in driving trade-offs between risk and value, thereby facilitating this need to constantly direct resources to the point of greatest strategic worth.

Done well, zero basing can help to drive the most granular level of cost transparency, introduce new levels of cost conscious behavior and aggressively reallocate both funds and capacity towards those areas where they can deliver the greatest value. 

However, the right approach is required. It’s essential to apply a relentless focus on engaging with leadership to own and drive results, testing historical attitudes to risk and prioritizing resources to activities that create the most value. A focus on following elements is required for reaching zero based success:

 

  • Prioritizing human factors over a technical process.
  • Focusing ruthlessly on value creation.
  • Injecting tension into the system.
  • Tackling attitudes to risk head on.
  • Focusing attention on driving long-term value from zero basing.

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