May be disruptive to the organization’s operations.Typically requires specialized training or personnel to accomplish, and requires more resources in general.Execution challenged by budget cycle timing constraints.Risky when potential savings are uncertain.May be cost-prohibitive for organizations with limited funding.Costly, complex, and time consuming as budget is rebuilt from scratch annually, whereas simpler and faster traditional budgeting requires justification only for incremental changes.Improves operational efficiency by rigorous challenging of assumptions.Supports cost reduction by avoiding automatic budget increases, often resulting in savings.Catalyzes broader collaboration across the organization.

Resulting budget is well justified and aligned to strategy.

Save to Grow- Deloitte’s Third Biennial Cost Survey: Cost Improvement Practices and Trends in the Fortune 1000. Five myths (and realities) about Zero-based budgeting, October 2014. Zero Based Budgeting: Americans for Prosperity, 2012. Perspective on considering a Zero Based Budgeting (ZBB) planning approach, Deloitte Analysis.Ģ. 4 When unsuccessful, the costs to an organization can be considerable.ġ. 3 When successful, ZBB produces radical savings and liberates organizations from entrenched departments and methodologies. Budgeters can apply ZBB to any type of cost: capital expenditures operating expenses sales, general, and administrative costs marketing costs variable distribution or cost of goods sold. 2 In ZBB, budgeters review every program and expenditure at the beginning of each budget cycle and must justify each line item in order to receive funding. 1 As opposed to traditional budgeting, no item is automatically included in the next budget.

Zero-based budgeting (ZBB) is a budgeting process that allocates funding based on program efficiency and necessity rather than budget history.

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