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METHODS
In the current context of competition and permanent price wars, companies need effective decision-making tools and
efficient budgeting methods to determine their overall strategy more effectively.
We propose an analysis of the evolution of the various methods used:
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BENCHMARKING : relative performance assessment by comparison with a category of actors often in the same
sector (external benchmark) or a functional or operational division that is identical or similar (internal
benchmark)
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BALANCED SCORECARD (BSC): a scorecard using a four-perspective approach to strategic objectives: Finance,
Customers, Internal business processes, and Organizational learning.
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ACTIVITY-BASED COSTING/ACTIVITY-BASED MANAGEMENT (ABC/ABM): this method helps managers
understand the creation of costs and the causes of their variation, through developing the cost allocation
principle.
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ZERO-BASED BUDGET (ZBB): No Guarantee. The budget may not be extended from one year to another. Each
expense must be justified.
Once again, we found that benchmarking is still the most commonly used method (72% in 2014 vs. 75% in 2015),
including in times of crisis, when there is a need to compare companies to other market players.
The BSC method is used mainly in the larger companies, with revenue in excess of 1 billion Euro.
The ZBB method, which was favored by companies showing decreasing growth rates or stagnation, now also seems to
be used in developing companies.
Overall stabilization or even slight decline in the use of certain methods
Following a continuous increase in the use of methods in recent years, opinion seems to be divided in 2015.
Benchmarking is still the most used methodology with a rate of 75%, up 3% compared to 2014, and steadily rising
since 2011.
The Administration sector is particularly interested in the
Zero Base Budget method (ZBB)
17% of respondents are not using any of the
reviewed methods
An overall stabilization of the use
of methods with a slight decline
in the use of certain methods
Benchmarking is the most utilized
method worldwide, mainly in growing
companies
IAFEI Quarterly | Special Issue | 23