There is so much literature out there about how to plan and implement organizational change, but almost nothing on how to budget for it, especially on a large scale. I'm interested in how large organizations are funding change management - separate line item, separate structure, allocation by employee, cost per project, etc. And how are returns being measured and quantified?
How do you budget for organizational change?
Answers
Anon,
Some short principles of budgeting:
1. Identify the types of expenses you'll likely incur:
a-outside services-consultants, tools, events, travel, marketing..
b-internal resources (if you want to track them): staff time attending CM courses, internal staff assigned to CM; cost of lost productivity/billable time if applicable
c. maybe even budget for some % of resignations/early retirements and replacement recruiting and hiring-if abnormal
2. Create an organization wide project ID in your ERP system for the CM project. Then ask each dept to budget the expenses in 1 against the CM project ID.
As for ROI, what's the driver to change?
-turn around a failing company-more topline, better bottom line
-are you going to reduce headcount anyway, or grow without adding headcount- if so, these decisions should be reflected in dept budgets for labor, and/or for more sales, lower costs, newer products....