The Swiss FP&A Boards: Zero-Based Budgeting

February 25, 2019

By Tijana Balotic Truong, Commercial Finance and Performance Management Professional

Zero based budgetingIn February 2019, the International FP&A Board held two meetings in Switzerland. The ninth Geneva FP&A Board and the eighth Zurich FP&A Board gathered more than 30 senior finance professionals each.

The focus of the both evenings was on the new era of zero-based budgeting (ZBB). Interestingly, the vast majority of the participants did not have prior experience with ZBB, while those who have used it before emphasizing transparency, collaboration, rethinking, reality check and transformation as key advantages. Main challenges represent time and energy to develop and implement the concept, questionable sustainability and actionability given the ongoing changes and an immense amount of data.

One of the suggestions was to build on the advantages of ZBB through applying it on specific, new projects and during the periods of organizational changes. In addition, ZBB represents a ground for driver-based planning, but it is necessary to keep the system flexible and able to factor in the fact that the drivers also change – what impacts the business today will not necessarily be the same compared in the next quarter.

In Geneva, two insightful case studies were presented – first by Alban de Vatteville from Nielsen, and the second one from Julien Barbedette from Revlon. The audience learnt how significant variances vs. operating targets trigger resource allocation and how ZBB can be used to evaluate investments, relying on ROI.

In Zurich, FP&A Board members discussed case studies from eBay and Cabot Corporation which were presented by Denis Ranke, Senior Director - CFO EEC at eBay, and Arnaud Valet, Finance Director, EMEA at Cabot Corporation.

Team discussions were themed around the key steps in the implementation of ZBB. At both events, participants split into 4 groups and main findings were common:

  • Ensure full management support (top management, cross-functional)
  • Emphasize that ZBB is a business initiative (not a finance initiative)
  • Define the scope and an actionable plan – identify key areas of implementation
  • Define key business drivers and have the frame defined by top-down targets
  • Involve people from other departments and constructively challenge business owners
  • Establish a database – collect, manage and analyze the data, drive actions
  • Share best practices

Following the tradition, the last part of the meetings was dedicated to networking during which the participants continued to share ideas and brainstorm on the subject.

The meetings were again enabled by our partners CCH Tagetik, Page Executive / Michael Page and IWG. Next Geneva and Zurich FP&A Boards are scheduled for May 21st and May 23rd , respectively, with another very attractive theme – Predictive analytics for FP&A.

FP&A Board, zero based budgetig