Zero-Based Budgeting (ZBB) has long existed, but now it has been revisited. It is a system that allows companies to align their resources along the corporate strategy drafted. It also helps in building a tiered cost structure. The five critical components of such a structure are transparency, process, governance, initiatives and the mind-set. One of the reasons for this renaissance in the ZBB has been the fact that a lot of corporate resources have been lying idle over many years. Technology and telecommunications is one industry which is already using ZBB to the hilt. This figure is slightly lower for the retail and consumer goods sector. Same goes for healthcare and pharma. Most financial services firms too have confirmed that they will soon be doing so. As of now transportation and utilities are making less use of ZBB, but many have confirmed to be on the path of implementing the same.

Source:https://www.mckinsey.com/business-functions/operations/our-insights/zero-based-budgeting-revisited-why-this-time-is-different?cid=podcast-soc-twi-mip-mck-oth-1808&kui=KiARSS3345csZPYKCpgVIw

Uploaded Date:01 September 2018