Zero-based budgeting (ZBB) requires managers to plan each year’s budget from scratch irrespective of the previous year’s budget or spend trend. ZBB is a great tool for organizations to optimize costs by allocating their budgets to align with their overall corporate strategy. Valorant has helped clients in implementing ZBB practices and achieving 10% to 20% more savings when compared to traditional cost saving techniques.

  • Zero-based budgeting (ZBB) is gaining traction and has the attention of investors, boards of directors, and corporate executives across industries as it continues to deliver results. Many companies which traditionally remain burdened by cost pressures, have been largely skeptical when it comes to adopting this revolutionizing methodology. Valorant can help these companies to transition successfully from a traditional budgeting approach to ZBB to realize cost optimization and other benefits.

Key characteristics of a Zero Based Budgeting approach

How Can ZBB Help Companies?

  • ZBB is about making smart choices on where to spend. Zero-based budgeting unlocks hidden cost savings for companies, allowing them to reinvest in long-term sustainable growth opportunities by resetting their cost base every year and ensuring it’s lean, effective and aligned with the company’s long-term strategy.
  • The impact of implementing ZBB in any organization is widespread and to do it right, it is important to understand how it is different from a traditional budgeting exercise.

How Zero Based Budgeting differs from traditional budgeting

  • ZBB requires a cultural change and calls for a new set of roles, responsibilities, and processes. Success depends on accountability, and leadership needs to be invested in the outcomes. If ZBB is not done right and followed as a continuous process, eliminated costs can quickly creep back, and people can often feel demotivated. It is therefore important for companies to find the right balance to implement a ZBB methodology in a sustainable manner.
  • Valorant follows a balanced approach towards implementing ZBB through the following key steps:

Establish vision and determine clear objectives with leadership support: First, we understand the motivation and determine the goals through interactions with key stakeholders including senior leadership. We link this vision to the company’s corporate strategy and design a tailored Zero-Based Budgeting program with clear objectives. Senior Leaders including the C-suite need to be fully engaged for the program to be successful


Establish governance model: We support companies in transitioning to a new decision-making system with increased accountability at all levels which is suitable for ZBB. We help organizations enable people through effective change management throughout the process


Prioritize Targets: We prioritize savings areas and set smart targets aligned with the company’s overall corporate strategy. The targets are used to drive initial budgeting exercise


Bottom Up Approach: We then create granular allocations from the bottom up and challenge the budget continuously. Target allocations are then integrated to get a holistic view of the budget


Monitoring Mechanism:We also help companies in setting up transparent systems for tracking costs and design efficient processes to address variances and the reallocation of funds as required


Milestone Based Execution: Once the action plan is finalized and approved by all stakeholders, we set milestones spanning people, processes and tools and follow a variance/reallocation process after each milestone is completed


Cultural Changes:Cultural change is a crucial component of ZBB implementation. We follow a proven change management methodology to establish culture of cost ownership and strong performance management to enable ZBB benefits


Interested in learning more about Valorant’s ZBB offering and how it can help your organization strategically reduce your cost base? Reach out to us now


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