The Zero-Based Budgeting (ZBB) consists on implementing an efficient process for budgeting an organization’s expenses. Thus, the main objective of the methodology is to establish a perennial cultural change that generates a virtuous cycle in reducing expenses year after year. Due to its effectiveness, the results are already visible in the first year of implementation.

Although it was initially developed to control fixed expenses, the methodology can be applied to the management of cost lines, variable expenses and revenue. The origin of the ZBB is linked to the fixed expenses’ management as they are the P&L lines with greater control and discretion on the managers’ part. Unlike these accounts, the other lines (revenue, cost and variable expenses) depend on other factors such as market behavior or the economic context. Thus, efficient management of fixed expenses guarantees a profitability lever that depends exclusively on the organization's management.

The principle of the methodology is to understand, define and monitor the use of resources necessary to meet the organization's strategic challenges.

The methodology consists of four work modules:

• Understanding of the current situation, where we map the use of resources and the budget management process, as well as an understanding of the organization's short and long-term strategic planning
• Defining and/or revising the rules for using resources and establishing guidelines for efficient spending together with the organization's managers
• Budget’s elaboration, where the organization's managers define their budget following the rules established in the previous module
• Control and monitoring of the budget, where a process for comparing the budget with the expenditure incurred is defined and implemented

Due to the flexibility of the methodology, the process can be adapted to the client's budget support tools, other management systems, or simpler tools such as Excel and BI interfaces.

One of the key levers we look at during the process is sourcing initiatives. For this, we have renowned partners in the market in several segments that can support us in capturing the identified gains.