If I close my eyes I can envision Ramaswany being a university faculty member. You know the ones who believe they have expert knowledge outside their field of study. They end up in university administration positions and either wreck havoc, or they're ignored. I have a PhD in accounting, retired after 35 years teaching and being an associate dean in a business school overseeing a multimillion dollar budget for the entire school. ZBB, as you so correctly pointed out, doesn't work. This is a long-winded explanation but, hopefully, shows the many variables that come into play. In practice, if an entity were to institute ZBB the people who do the work would look to last years budget as a starting point anyway. Humans don't do well in a "pretend that nothing happened previously and create a universe" in two weeks. There are actually three budgets that I looked at (keep in mind this is a university, not the federal government): 1) the "budget" that you had when you began the year; 2) the adjusted budget that happened because you moved money around from different expense lines when you had to pay the bills: and 3) what you had at year end. Number 2 is important because, except for salary and benefits lines, I could move money to and from any expense line without approval or justification to anyone, so why would I kill myself to get the perfect beginning of the year line item budget number? I did tweek our budget each year to try to get a better feel for expenses, but there were always unexpected items. The university also had a "rule" that you could not show a deficit in any expense line, so I'd move money around to zero out deficits. This didn't make a lot of sense because at year end, each school's budget is compressed to show one expense number so surpluses and deficits offset each other and it hides where you overspent your budget. Budget cutbacks would sometimes come prior to the beginning of a new year and sometimes they'd come later in the year. If you knew a budget cut was coming (accountants tend to have more insider financial information than anyone else) you'd try to make spending commitments. The "use it or lose it" philosophy for having your budget cut if you don't spend the money prior to year end is impotent if you can easily move money around, and it leads to a lot of unnecessary capital equipment purchases prior to year end. How about everyone leans on their own expertise and stays in their lane when making proposals that effect large portions of the population. I respect Don's expertise and would never assume that I knew more about the subject than he does. That's why I subscribe and read his work.
If I close my eyes I can envision Ramaswany being a university faculty member. You know the ones who believe they have expert knowledge outside their field of study. They end up in university administration positions and either wreck havoc, or they're ignored. I have a PhD in accounting, retired after 35 years teaching and being an associate dean in a business school overseeing a multimillion dollar budget for the entire school. ZBB, as you so correctly pointed out, doesn't work. This is a long-winded explanation but, hopefully, shows the many variables that come into play. In practice, if an entity were to institute ZBB the people who do the work would look to last years budget as a starting point anyway. Humans don't do well in a "pretend that nothing happened previously and create a universe" in two weeks. There are actually three budgets that I looked at (keep in mind this is a university, not the federal government): 1) the "budget" that you had when you began the year; 2) the adjusted budget that happened because you moved money around from different expense lines when you had to pay the bills: and 3) what you had at year end. Number 2 is important because, except for salary and benefits lines, I could move money to and from any expense line without approval or justification to anyone, so why would I kill myself to get the perfect beginning of the year line item budget number? I did tweek our budget each year to try to get a better feel for expenses, but there were always unexpected items. The university also had a "rule" that you could not show a deficit in any expense line, so I'd move money around to zero out deficits. This didn't make a lot of sense because at year end, each school's budget is compressed to show one expense number so surpluses and deficits offset each other and it hides where you overspent your budget. Budget cutbacks would sometimes come prior to the beginning of a new year and sometimes they'd come later in the year. If you knew a budget cut was coming (accountants tend to have more insider financial information than anyone else) you'd try to make spending commitments. The "use it or lose it" philosophy for having your budget cut if you don't spend the money prior to year end is impotent if you can easily move money around, and it leads to a lot of unnecessary capital equipment purchases prior to year end. How about everyone leans on their own expertise and stays in their lane when making proposals that effect large portions of the population. I respect Don's expertise and would never assume that I knew more about the subject than he does. That's why I subscribe and read his work.
Thanks so much. Appreciate the support!!
Thanks - I hope so!!