SWTCH by Pigment
Three days of predictions, insights, and advice from leaders in finance, sales, HR, supply chain and more
Register now here
SWTCH by Pigment
Three days of predictions, insights, and advice from leaders in finance, sales, HR, supply chain and more
Register now here
By Hans Gobin, International FP&A Board Ambassador
In the last couple of years, we have seen the business world turn upside down and organisations confronted with an ever-changing and dynamic environment. The traditional budgeting process is long obsolete. With most Organisations are not ready to abandon their traditional budgeting, Zero Based Budgeting is definitely a great way of improving and keeping the traditional budget relevant.
Members of the Middle East FP&A Board met digitally in November to explore the New Age of Zero Based Budgeting (ZBB).
For Clara Hoon, International Finance Leader at Nielsen, ZBB is not just about cost. It’s a change in mindset and way of thinking about your business. It involves all lines of P&L, B/S and C/F. It is a business model and is worked on all year round not just once a year and most importantly brings agility to the organisation in a changing environment.
The key enablers of ZBB are Management Buy-In / Clear & Relevant Drivers / Creativity / Constant Review and most important is Transparency.
Akshat Khandelwal, CFO at The Kraft Heinz Company ME, goes one step further and explores the idea of how ZBB could be extended to Beyond Budgeting. For Kraft Heinz the key aspects of ZBB are:
The P&L is split into:
These are supported by string routines, the annual budget, Monthly reviews and Savings Projects where ideas are shared and also benchmarked. The major goal is Reinvesting non-working spending into working spend!
In Pharmanovia, ZBB played a key role during Covid! Mohamed El-Rouby (CFO, MEA) put into place a project looking at all levels of risks and the impact on the organisation and the budget.
A checklist for each of these blocks was designed and the following questions were addressed:
This ensures even in Uncertain times, all the risks are mitigated and brought into the process. It is also imperative to have continuous review and amendment throughout the whole process.
Advance in Technology means today more than before, we can achieve all of this. For Andreas Simon, Regional Director MEA at Jedox, new software can help us achieve our goals with better ZBB in the following ways:
Extended Planning and Analysis (xP&A) adoption empowers the modern finance function to drive transformation also on Zero Based Budgeting. The new ways of working offer:
In conclusion, now more than ever, one should be adopting Zero-Based FP&A instead of traditional budgeting. Consider the 10 steps approach in implementation.
We would like to thank our global sponsor Jedox for great support with this Digital FP&A Board.
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