Seth Catalli, chief revenue officer at Globality, argues that the rise of artificial intelligence is creating the right environment to use zero-based budgeting (ZBB)
In the 1970s, a time of economic tension in the wake of a major oil crisis, US president Jimmy Carter said he had an answer to uncontrolled government spending – an approach called zero-based budgeting (ZBB).
Famously in an MBA seminar talk, the president tried to make his administration adhere to the discipline in 1977.
The ZBB idea was a budgeting method that required all expenses to be justified and approved in each new budget period, typically each year, rather than relying on historical expenditure patterns.
By applying this rigour to the budgeting process the idea is that finance heads can be sure that they are making the best purchasing decisions based on up-to-date market data.
