The Business Budget is one of the most important management tools within an organization. It encompasses, incorporates and formalizes all of the company's annual operations and programs through financial, economic and performance statements. Most of the time, it is prepared based on past performance, regardless of scenarios, operational problems, processes, high costs, and may reflect inefficiencies that have already occurred in the future.
Markets are currently characterized by rapid change in scenarios, high volatility, mergers and acquisitions, new competitors, technologies and products emerging all the time, making us have to rethink cost models, processes, as well as the way we design our business budget. It is vital to rethink the cost structures and operations in companies”.
To assist in this new way of planning or managing companies, we have the Zero Base Budget (OBZ) , which is a methodology for preparing the business budget and operating plans, in which, each year, we must start from scratch, that is, budgeting the company within new realities, scenarios, completely detaching itself from the past. OBZ requires that each activity is justified based on a cost-benefit analysis, assuming that there is no commitment to the present or past, but to what will be produced and marketed within the structure of costs and activities necessary for this to occur. In this budgeting process, we have to define for each decision package the:
Threshold
Different ways to perform the same operation
Different levels of effort for different levels of results
Consequences and benefits of each activity and cost analysis
Prioritization of decision packages
PDCA
systemic monitoring
When we rethink each decision package, we are forced to review all processes: how we perform our activities within companies, where we allocate capital, which structures really add value to the organization and, with this, we are able to eliminate function redundancies, repetitive work , underutilized and unnecessary systems that help inflate costs without adding value to the customer.
This robust budgeting method can be applied to almost all types of administrative, selling, logistical, overhead costs, including capital expenditures. OBZ has proven to be a successful budgeting methodology and is recognized worldwide for the comprehensive savings it can provide. The savings generated can be applied in investment programs and activities and adding value to the client.
With our Zero Base Budget implementation methodology, we help our clients plan their business activities with effective reduction of total operating costs, combining forensic insight into their costs with organizational, functional and internal benchmarks to set goals.
Value beyond cost savings
Improve financial performance by reducing overhead and overhead costs by 15% and 20%.
Free up working capital for investment in growth.
Gain competitive advantage by repositioning your cost base.
Streamline and flex your organization to respond to changing markets and demands.
Understand spending patterns by comparing them to industry and competitors.
Create a culture of accountability and cost awareness while maintaining productivity and production.
Valini Consulting & Training seeks, through its methodologies, to help companies in a number of sectors to introduce the best management methodologies. This ensures that our clients successfully deal with strategic, cost, investment and financial decisions. For more information contact us by phone and email below.