Global Companies Are Saving up to $1 Billion to Fund New Growth by Adopting a Zero-Based Mindset, According to Accenture
February 28 2018 - 7:59AM
Business Wire
The largest ever research on zero-based
budgeting shows a shift to a more holistic zero-based mindset, or
ZBx, creates a culture of ownership and cost control not previously
possible
Leading global companies are realizing savings of up to $1
billion from the adoption of zero-based strategies, according to
the largest ever study on zero-based budgeting (ZBB) strategy,
conducted by Accenture (NYSE: ACN). The research, which surveyed 85
of the biggest organizations around the world, revealed that
companies are moving beyond simple ZBB to a more holistic approach,
or ZBx, that allows companies to uncover additional savings to fund
growth initiatives.
This press release features multimedia. View
the full release here:
http://www.businesswire.com/news/home/20180228005212/en/
(Graphic: Business Wire)
The ‘Beyond the ZBB Buzz’ study by Accenture Strategy analyzed
the practices and results of zero-based initiatives implemented by
leading global companies across different industries - from
consumer goods and banking to retail and life sciences. The study
highlighted the exponential growth in ZBB adoption of 57 percent
per year from 2011 until today, and found that the majority of
companies surveyed (91 percent) have met or exceeded their
financial targets.
“ZBB is rapidly helping organizations accelerate growth
strategies and pivot to new digital business models,” said Kris
Timmermans, Senior Managing Director and Supply Chain &
Operations Strategy lead at Accenture Strategy. “Due to the savings
realized, leading global companies are taking ZBB to the next level
by applying a zero-based mindset – what we have termed ZBx – across
all business functions to gain forensic visibility into spending
and funnel savings back into high growth initiatives.”
Zero-based strategies accelerating growth
Companies are adopting ZBB primarily to improve profitability
(96 percent). Yet, nearly half (48 percent) said they were
influenced by competition and 40 percent cited slow growth as a
catalyst. Surprisingly, the research did not point to the common
perception that companies turn to zero-based strategies in crisis
mode in an M&A scenario or as the result of pressure coming
from private equity funds and activist investors. Only 14 percent
say M&A was a driver and even fewer (eight percent) cited PE or
activist investors as a factor.
While the majority (92 percent) of companies surveyed
implemented ZBB strategies to reduce general and administrative
costs, the research highlights leaders are applying a zero-based
mindset to other business functions, such as sales and marketing
(52 percent), labor (43 percent) and logistics (42 percent).
Companies are taking out inefficient money that doesn’t support
business strategy and redirecting those resources into growth
initiatives, digital investments and other capabilities.
Challenges to applying ZBx
Among the hardest obstacles to adopting a zero-based mindset are
cultural buy-in (67 percent), change management (41 percent) and
data visibility (33 percent). However, once the initiatives are in
place, there is a common desire among the companies surveyed to
ensure they are durable, with 77 percent investing in control and
monitoring to make the results of their zero-based initiatives part
of continuous improvement.
“Unlike traditional cost management techniques that use a
‘cut-the-fat and gain-it-back’ approach like every fad diet does,
adopting a zero-based mindset requires a full cultural
transformation within an organization. It must become ingrained in
how people think and work so that it begins to just happen
naturally – that’s how you prevent the ‘weight’ from coming back,”
said Timmermans.
To find out more about the report, visit:
https://www.accenture.com/us-en/insight-beyond-zbb-buzz?c=strat_accenturestratemediarelationsv_10231513&n=mrl_0218.
Join the conversation at @AccentureStrat.
About the research
Accenture identified 136 major companies that use zero-based
mindset (ZBx) to reduce costs and reinvest. Sixty-percent of these
companies are in the top 2000 globally. From this distinct set of
companies, Accenture analyzed the scope, results and practices of
their ZBx programs based on 85 in-depth examinations and executive
interviews carried out between November 2017 and January 2018.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries
and all business functions – underpinned by the world’s largest
delivery network – Accenture works at the intersection of business
and technology to help clients improve their performance and create
sustainable value for their stakeholders. With more than 435,000
people serving clients in more than 120 countries, Accenture drives
innovation to improve the way the world works and lives. Visit us
at www.accenture.com.
Accenture Strategy operates at the intersection of business and
technology. We bring together our capabilities in business,
technology, operations and function strategy to help our clients
envision and execute industry-specific strategies that support
enterprise wide transformation. Our focus on issues related to
digital disruption, competitiveness, global operating models,
talent and leadership help drive both efficiencies and growth. For
more information, follow @AccentureStrat or visit
www.accenture.com/strategy.
Copyright © 2018 Accenture. All rights reserved. Accenture, its
logo, and High Performance Delivered are trademarks of
Accenture.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180228005212/en/
AccentureMaggie Nolan,
+1-845-661-0952margaret.d.nolan@accenture.com
Accenture (NYSE:ACN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Accenture (NYSE:ACN)
Historical Stock Chart
From Sep 2023 to Sep 2024