In the wake of the Covid-19 Pandemic, market volatility has significantly impacted many business's abilities to create accurate and reliable forecasts. Incorporating zero-based budgeting – a method which requires all expenses to be reviewed and approved in each budget cycle - in Workday Adaptive Planning provides the flexibility to rethink legacy budgeting procedures and navigate an uncertain economic environment.
Many companies are shifting their planning process to a zero-based budget as driving budgets solely off prior year actuals has proven inaccurate following several trend-shattering years. Zero-based budgeting in Workday Adaptive Planning is a self-service tool that streamlines and automates a lot of the manual work that is involved in zero-based budgeting and provides real time visibility to support more effective operational and strategic decision making. In recent months, we have helped our clients evaluate and identify where a zero-based budget approach is appropriate. One use case involved moving from a very manual and high-level budget process in excel for Vendor-based planning to a more efficient approach in Workday Adaptive Planning. We were able to incorporate dimensions (unique and reportable fields) for both Vendor and Location to allow for more granular planning. This allowed the client to have increased visibility into where and when these dollars are actually spent and generate real time reports by vendor, cost center, location, and time period.
Zero-based budgeting is a shift in the leader’s mindset because it forces leaders to question old forecasting habits and historical assumptions. This method allows for full re-evaluation of prior year actuals, increase visibility to the actual spend happening in the business, and added flexibility to adjust forecasts in times of uncertainty. Many companies are hesitant to adopt zero-based budgeting as it can be a time-consuming approach. However, the time savings and flexible reporting provided by Workday Adaptive Planning open the door to dedicating the necessary time and thought to the zero-based budgeting process.
Reach out to Ascend Planning Solutions today to learn more about how zero-based budgeting in Workday Adaptive Planning can increase forecasting accuracy and help your business succeed in this rapidly evolving market.
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