While basic cost cutting programs are important, they are often limited in their reach and impact. Zero-based budgeting is a methodology and way of working that makes cost management an everyday way of life. It provides insight into true spend, provides rapid cost takeout and embeds a culture of accountability and zero based budgeting for ongoing cost.
Our structured approach to ZBB allocates funding based on program efficiency and to the point of use rather than budget history or ownership. ZBB provides forensic-level insight into true spend types and their end use location to benchmark and target cost reductions across people, property, direct and indirect spends.
ZBB challenges all expenditure and justifies spend from the ground up. Category and budget ownership are put in place providing executive challenge, and visibility and control to embed an accountability culture.
This robust method of budgeting can be applied to almost all types of cost, including capital expenditures, operating expenses and cost of goods sold. ZBB has proven to be a successful budgeting methodology and is recognized worldwide for the comprehensive savings it delivers, thereby freeing enterprises from unproductive programs, departments and functions.
Drive Sustainable Growth and Profitability with ZBB
At GEP, we help our clients target and reduce their total operating costs by combining forensic insight into their costs with organizational, functional and internal benchmarking to define targets.
Through ZBB, we reset the baseline cost and then extract costs through various demand, cost, structure and process levers. We work with you to embed a culture of cost consciousness throughout the enterprise, and enable control and monitoring of category and budget governance.
Our ZBB experts analyze your spend and map your total costs to value chain activity to determine which activities add value and which ones don’t (good costs vs. bad costs) and select the right levers to influence the outcome and cost base.
Value Beyond Cost Reductions
- Improve financial performance by reducing SG&A between 15 and 35 percent
- Free up working capital and non-working dollars for investment in growth
- Gain competitive advantage by re-positioning the cost base and getting insight into fixed and variable costs
- Enable agility and flexibility to respond to changing markets and demands
- Understand spending patterns compared with the industry and competitors
- Create a culture of accountability and cost consciousness while maintaining productivity and output