Wednesday, January 23, 2013

 

Lean Thinking and Zero-Based Budgeting

In zero-based budgeting, every line item of the budget must be approved by the business. This is distinct from asking for a delta increase or decrease based on prior numbers. In reviewing a zero-based budget, no reference is made to the previous level of expenditure. Zero-based budgeting requires the budget request to be examined thoroughly at each revision.

While I hate the supposed bureaucracy that can emerge from zero-based budgeting, I believe there is an immense opportunity to eliminate wasteful spending as well. If IT wants to align with the business, it has to have clear insight into past, present and future spend and focus on utilizing money in the best way possible...





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