What started as a budgeting technique forty years ago has today become an invaluable
leadership tool that aligns the strategic priorities of a whole organization. Companies that are
behind in zero-based budgeting (ZBB) get left behind everywhere else. In fact, it has become
non-negotiable for survival.
Take the example of a leading brewing company in India that was experiencing flailing margins.
It teamed up with Accenture to establish a ZBB program to enhance profitability. The program
delivered cost optimization of 11-12 percent on the addressable spend baseline-across the
entire P&L. More importantly, the client and Accenture collaborated to drive a company-wide
cultural change in mindset. By adapting a "control tower" approach and implementing ZBB
principles across the organization, it was able to establish a sustainable, cost-conscious ZBB
A recent Accenture survey unpacked the ZBB buzz by speaking with top companies that have
gone zero-based. The survey found that adoption of ZBB has grown exponentially by 57 percent
every year, over the last five years. In fact, more than 90 percent of companies globally have
fully met or exceeded their program targets. Most major companies are focusing on more than
US$1 billion cost savings to fund growth strategies and pivot to digital business models. It's no
wonder then that a zero-based mindset is the ideal approach for Indian businesses.
Anything "zero-based" is the rage today.
The media is flooded with stories of companies that have successfully used
zero-based methods to reduce costs and boost profitability.
FIGURE 1: GROWTH IN ZERO-BASED BUDGETING PROGRAMS
ZERO IN ON PROFITS
ACCENTURE BUSINESS JOURNAL FOR INDIA 2018
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