Zero-Based Budgeting produces positive results for LAMSAC

09.Dec.2015

It is well known that cultural differences and regional economic scenarios influence the final results obtained by different management methods. In Peru, for example, where growths of 3.1% in 2015 and 2.8% in 2016 are expected, there is an atmosphere of opportunities in different sectors.

LAMSAC, concessionaire in the roads segment and associated to the Brazilian group Invepar, has begun a management program by implementing the Zero-Based Budgeting method, which is still a pioneer method in the country, and has followed it with the development of Business Chain using the method BPM – Business Process Management.

The method ZBB, implemented since 2014 with the support of Aquila Institute, has allowed the company to analyze all its expenses in detail, including the price of fruits provided weekly to each collaborator and the cost of equipment and persons. This allows to prioritize the demands from strategic planning and to redefine the service levels of each of the processes related to its chain value. The initial work resulted in a reduction of 11.2 million soles, equivalent to R$ 12.4 million, compared with the previous plan. For the following year, the project goal is to attain the budget proposed and to look for new opportunities of reduction through the use of Expenses Matrix.

Besides the restructuring of priorities and cost analysis, the budget preparation now includes the participation of the managers. The collaborators were used to accept the project as developed by a specific sector and approved by the top management only, and they did not identify themselves with or felt responsible for the attainment of results. With the new culture of alignment between areas, the managers began to participate in the process, leading to move positive results. Besides the movement, with the objective of attaining the proposed goal, managers are also being trained to become leaders of improvement projects in the company.

“The work developed by the Aquila-LAMSAC partnership has allowed the company to establish a relationship between costs and benefits, and the need to rationalize the use of resources”, comment Reni Araujo Junior and Bruno Saraiva, Aquila partners.

The direct consequence of these actions, according to the consultants, was a higher budget credibility and a higher commitment of the managers to the areas to be improved in 2016, resulting in challenges compatible with the service expected from each collaborator.

The success of the work being developed at LAMSAC is also related to the receptivity of the Peruvians. The country has a policy of commercial partnership with other countries and a low public debt, thus being less vulnerable to the external market. This favors a competitive economy and excellent opportunities, especially in areas related to tourism, mining, energy, petrochemical, commerce, retail sales, and infrastructure. The proximity with the Brazilian culture is also a favorable factor, especially regarding the theme of management. “It is fundamental to create a relationship based on the following characteristics: integrity, flexibility, experience, knowledge of the culture and of the legal and educational systems of the country, and, on the top of all that, a commitment to results”, stated Reni.

LAMSAC Works in the roads segment and is associeted to the Brazilian group Invepar.

LAMSAC Works in the roads segment and is associeted to the Brazilian group Invepar.

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