Zero-based budgeting (ZBB) is a concept that came in 1970 to help businesses manage their costs better. ZBB, as opposed to traditional budgeting, doesn’t automatically include any item in the next year’s budget.
Although the concept became vague and outdated as companies went back to conventional budgeting techniques, it is gaining back traction as some experts find that annual budget created through ZBB is aligned to overall strategy and helps improve operational efficiency by challenging assumptions under conventional budgeting.
Procurement organizations that are willing to explore the possibilities of ZBB will find that they are able to identify savings opportunities through demand management techniques as well as help enterprises understand spending patterns as compared to their competitors.
Continue reading to explore GEP’s Zero-based budgeting solutions.