ZERO BASED BUDGETING IS A MARKER OF AGILITY
IS ZERO-BASED-BUDGETING (ZBB) THE WAY TO GREATER FINANCIAL PLANNING AND ANALYSIS ACCURACY?
If you want to improve accuracy, then FSN’s latest research, “Agility in Planning, Budgeting and Forecasting” highlights that ZBB is the way to go. The question is why?
The idea that a budget is recalibrated or reset, without the clutter of prior year assumptions is definitely liberating. It forces finance teams to re-think the essence of budgeting, rather than simply tweaking last year’s budget a few percent up or down.
It’s not an easy technique to deploy but is particularly well suited to a crisis (like COVID) where many previous assumptions are no longer valid. And it is not an all or nothing. FSN’s advice is that ZBB is used alongside other techniques such as rolling forecasts and scenario planning.
Have you experienced ZBB. Would you recommend it to others?
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“It depends on the profile and strategic & financial situation of each company. ZBB could be an amazing opportunity to drive change and also to change the set of mind of the stakeholders.
My personal experience is that using ZBB I have found a lot of opportunities, mainly in Expenses projections, delivering an important amount of savings positively impacting the Operating Profit. It’s an excellent way to challenge the set of mind of the company.”
Related Infographics in the Agility in Planning, Budgeting & Forecasting Series
HOW AGILE IS YOUR FORECASTING PROCESS? In this first infographic we explore how responsive or agile the PBF (Planning, Budgeting and Forecasting) process is to change against a series of FSN stress tests. The research finds that changing reports and reporting structures (hierarchies) remains a challenge.
HAVE WE SACRIFICED FP&A ACCURACY IN FAVOUR OF SPEED? The second infographic from our “Agility in Planning, Budgeting & Forecasting” research shows that forecast accuracy is getting worse – this despite many organisations forecasting more quickly.
WHICH IS BETTER? – ROLLING FORECASTS OR FORECASTING 4 TIMES A YEAR? The third infographic from our “Agility in Planning, Budgeting and Forecasting” research demonstrates that Rolling forecasts imbue PBF with agility.
THE CHARACTERISTICS OF THOSE USING ROLLING FORECASTS The research find that in essence if you are spreadsheet-bound, have not mastered your data and are not using specialist software, then rolling forecasts are technically out of reach.
ZERO BASED BUDGETING IS A MARKER OF AGILITY If you want to improve accuracy, then FSN’s latest research, “Agility in Planning, Budgeting and Forecasting” highlights that ZBB is the way to go
Related Discussions in the Agility in Planning, Budgeting & Forecasting Series
HOW RESPONSIVE IS YOUR FORECASTING PROCESS? 60% of organizations can reforecast in under a week, yet just 40% are able to forecast with any real degree of accuracy and only 20% can forecast a year ahead with confidence. How come?
HAVE WE SACRIFICED FP&A ACCURACY IN FAVOUR OF SPEED? The second infographic from our “Agility in Planning, Budgeting & Forecasting” research in this forum shows that forecast accuracy is getting worse – this despite many organisations forecasting more quickly.
WHICH IS BETTER? – ROLLING FORECASTS OR FORECASTING 4 TIMES A YEAR? Are you considering rolling forecasts? If you use rolling forecasts, what has your experience been?
JUST 19% OF ORGANISATIONS LEVERAGE THE POWER OF ROLLING FORECASTS. WHY? So, what is stopping you implementing rolling forecasts and how can you bring about the change?
IS ZERO-BASED-BUDGETING (ZBB) THE WAY TO GREATER FP&A ACCURACY? Have you experienced ZBB. Would you recommend it to others? How do you create agility using Zero Based Budgeting?