Zero-based Budgeting Services

Our Zero-based budgeting (ZBB) services help businesses realize cost savings, fund the future and create long-term value. We help c-suite executives create cultures that reduce non-strategic costs to free up cash for investments in strategic areas through disciplined annual financial planning and budgeting.

Related topics CFO agenda Finance Growth Long-Term Value Strategy and Transactions

The team

Akshat Dubey

Akshat Dubey

EY-Parthenon Principal, Value Creation, Ernst & Young LLP

Sheri Yadav

Sheri Yadav

EY-Parthenon Managing Director, Value Creation, Ernst & Young LLP

What ZBB services can do for you

In a world that is going through rapid digital change, companies increasingly may need to reduce non-strategic cost and increase strategic spend to remain competitive and grow value. We help CEOs, CFOs, chief strategy officers and other leaders decide where to best allocate their dollars through ZBB. These services deliver:

  • Strategy alignment and cost transparency
  • More effective budgeting (people and non-people costs)
  • Creation and consistent use of digital budgeting tools across the enterprise
  • Better accountability, governance and sustainability
  • Enhanced controls and monitoring
  • Operating model enhancement

ZBB clients may save 10%-25% of their Selling General & Administrative (SG&A) cost base, based on our experience. These funds can be reinvested in growth areas. Companies can sustain the savings achieved through ZBB for the long term with “Cost Champions.” These are C-suite leaders who help drive cost governance, a ZBB mindset and improvements to monitoring budgets and spending.

ZBB questions we help you answer

  • Where are we spending money, both on personnel and third parties?
  • What spending is not strategic?
  • Where are cost-saving opportunities, and how large are they?
  • Where should we invest to drive growth?
  • Are we investing enough in digital?
  • How do we build effective targets and budgets?
  • What digital tools can we use to improve cost management and financial planning?
  • How do we make cost savings sustainable?
  • How can ZBB help in a targeted restructuring?
Using ZBB, we were able to self-fund our growth.
CEO
Major consumer products company

What results have we delivered for clients?

We have helped public and private companies across a wide spectrum of industries deliver SG&A savings. Recent examples are:

  • Consumer products

    We assisted a US consumer products company in realigning its budgeting with its strategy with a digital ZBB solution. By linking every SG&A spend item to the company’s ambitious growth strategy, we helped the company reduce its non-strategic spend and gave the company visibility into demand drivers and cost streamlining opportunities, resulting in 10% savings.

  • Energy

    We provided a profitable energy and logistics company with methods to enhance and standardize budgeting processes across its portfolio companies. It rolled out a “Cost Champion” model for accountability when budget excesses surface in key categories, including new-hire requests. We helped the company identify SG&A savings of more than 7%, which was partially reinvested to strengthen customer loyalty through big data, analytics and digital transformation.

  • Food service

    At a private equity (PE)-owned portfolio company, we worked with the C-suite to realign the organizational structure to drive value on the company’s strategic goals of expanding into new global markets and product channels and launching a digital strategy with digital ordering. Results included cost savings of 12%, a headcount reduction of 25%, retrained talent and an operating model that was ready to drive value.

  • Hospitality

    A major cruise operator that was facing financial distress at the start of the COVID-19 pandemic needed to quickly address short-term liquidity needs. Working with EY, it implemented a quick, strict ZBB cost savings project and consolidated capabilities across business units to enhance the operating model. Results included an SG&A cost reduction of 20%, a cost of goods sold reduction of 3%-5%, a minimization of short-term losses and freeing up of future resources to invest in growth rather than interest.

  • Private equity

    We worked with a team to implement ZBB – from cost visibility to budgeting and control and monitoring – across one PE portfolio nine companies in sectors including agribusiness, consumer products, oil and gas, retail, transportation and logistics. Results included more than 200 cost-savings initiatives identified, 50 C-suite Cost Champions trained and mobilized, and 9% SG&A savings.

  • Retail

    During the pandemic, we led a retail chain through ZBB, building cost management capabilities, mobilizing executive Cost Champions and realizing savings of $50m. This was achieved by deploying a digital ZBB platform with detailed budget templates, training over 300 users to use the platform, and improving cost governance with executive Cost Champions. The savings achieved represented a 40% reduction in spending from two years prior.

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