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The process involves review of the expenditures incurred by every department each year. It considers current expectations. On the basis of this, expenditures are allocated and revenues are estimated for the next period.
In other words, it is built around what is needed for the upcoming period, regardless of previous allocations made. The primary objective of it is to reduce unnecessary costs.
According to a recent report by KPMG, zero-based budgeting on discretionary spends for the coming 2-3 years could be beneficial. Questioning the very need for some of these spends could be a step taken by corporates. It will make them leaner and more profitable when growth starts to return.