StrategicZero-Based Budgeting

Proposal for a Master class

The aim of Zero-Based Budgeting:1. Where and how can we most effectively deploy

people and resources?2. How much must we spend?

Why do it?

Bain & Company“cutting as much as 25% of spending on overhead and support functions, while boosting efficiency and competitiveness.”

BCG, Boston Consultancy Group“an aggressive differentiation of investment levels by brand and market segment… freed up as much as 20 percent of their advertising and promotion investment… focus spending where it will have the greatest impact.”

EY, Ernst & Young“major companies appears to have driven, and be still driving, very impressive increases in gross and net margin.”

McKinsey & Company

• “ZBB is especially useful for private-equity firms.

• … aligns well with the return-on-capital approach that the industry favors.

• … eliminate unproductive costs (often as much as 10 to 25 percent of SG&A in six months), allowing owners to reallocate capital to growth, through marketing, sales, and M&A.

• … can be rolled out across a portfolio of companies, ensuring aligned processes, controls, cadences, and incentives.

• … ZBB gives private owners the standard but flexible approach they want for perhaps the most essential corporate process: the allocation of capital.”

A.T. Kearney

“… pursues significant new efficiencies in contracting practices, "make versus buy" tradeoffs, demand reduction, requirement simplification, operational efficiency, applied analytics, rules and policies, and much more.

“It is music to finance’s ears when they hear that ZBB done right can achieve truly meaningful cost reductions across

• the company’s core operations,

• top-line items (commercial discounts, policies, and other trade investments),

• recurring costs (COGS, OPEX, and headcount)

• and non-recurring costs (CAPEX).”

How does it look like?

Note: Each block is called a “package”.

Master class…a possible programme

1. Introduction• Why and When• Advatages• ‘Old’ disadvantages• My experience

2. Strategic Zero-Based Budgeting• Phyrr, 1970s• Why it works!• Intelligence: KPI's,

internal control, operational risks, performance, culture

3. Practice*• Marketing & Sales• Procurement• Finance• Operations/Projects• Design/Innovation• Management

* Depending on the participants

4. Implementation• Management

misperception• ZBB process• Deliverables• Strategic choice• Transition & embedding

5. My experience• Board of Directors• Carve-out• Turnaround• Product Portfolio• Other possibilities: M&A,

‘Bolt-ons’, PE operational ‘playbook’

6. Future• Culture: Transition into

Entrepreneurial Management

• Embedding: Rolling forecast & Accounting instructions

• Q&A

…a Master class proposal

ObjectiveAn ‘In-company’ Master class to provide all the information you need to execute a Zero-Based Budgeting project successfully. Zero-Based Budgeting is a method to reallocate company resources and focus efforts to achieve its ambitions most effectively.

Possible advantages of applying Zero-Based Budgetinga) Reduction of spendb) Reallocation of resources to increase revenues, ROI, or other investmentsc) Identification of alternatives, opportunities, and (hidden) operational risksd) Provides strategic choice and a strategic ‘roadmap’ e) Increased understanding at the topf) And effectively giving purpose to each activity

Learning experience:a) Full insight into this strategic method, and practical exercises.b) Tips & Tricks on implementing ZBB and strategic choice / prioritising.c) Application in M&A, growth strategy, turnaround, business (re)modelling, etc.d) Preparation to assume the role of Strategic Business Partner.

InvestmentDuration: 1 afternoon.Price: TBD; excluding VAT. This excludes international Travel & Expenses.

OptionalThe programme can be adjusted, in length and content, to the wishes of the client.

What others say about Richard:

“He succeeded in an excellent way is to dispel the suspicion and persuade managers to look in a different way on the effectiveness of their own work process. This is undoubtedly his greatest contribution to the success of ZBB.”

“Particularly valuable were his contributions in team meetings. These were not just about the progress and method, but also on how to handle interventions.”

“Richard looks critically at processes and procedures and has an ongoing drive to improve the effectiveness and efficiency. He is able to add in complex and especially strategic issues other types not obvious, unorthodox insights. He thinks forward looking and beyond existing frameworks, yet can also translate this well into practice.”

“Rational and analytical, he can quickly master complex subjects, as well as make company-specific situation his own. He will surely be of added value for organizations that want to solve integral several or multi-disciplinary issues.”

For more information:Richard ReinderhoffFreelance (registered at kvk.nl)the Netherlands

mobile: +31-6-4285.2424email: reinderhoff@yahoo.co.ukL-In: www.linkedin.com/in/reinderhoff

StrategicZero-Based Budgeting

…be in the driver’s seat