The concept of Zero Based Budgeting (ZBB) is by no means new. It has been around for almost 50 years and has been used by many commercial and non-commercial organisations whose overriding objectives are to shed the unnecessary expenses.
We’ve all come across checkpoints in our personal lives where we commonly think about or use phrases such as “let’s take a few steps back”, “I need to reset things” and “let’s start all over again”.
What are the key success factors for implementing an effective and efficient Zero-Based Budgeting (ZBB) process? The Singapore FP&A Board had a very interesting debate on the subject and the conclusions from the debate are reflected in this article.
The 19th London FP&A Board was debating about Zero Based Budgeting (“ZBB”). One of the key questions was if companies see a new Era for ZBB. The meeting was well attended and was a great success.
As the year slowly draws to a close, CFOs also start their annual haggling over costly budget items. Various challenges force companies to dismantle old, cost-inefficient structures. In looking for new budgeting options, a well-known but controversial method is moving back into the limelight: zero-based budgeting (ZBB).
Why, when everyone hates it, do we still have traditional budgeting? My tentative answer to this would be that most people were not aware of the alternatives.