You can’t do KM without a budget

One of my Knoco colleagues was in a KM workshop a while ago with a client, and raised the issue of the KM Budget. One of the people in the room said “What? Does Knowledge Management need a budget?” 

Budget, by 401(k) 2012, on Flickr,

My colleague was taken aback, but was able to point out that Yes, KM needs a budget, all KM programs have a budget, the budget will be substantial, but the rate of return will be even greater.

If there is anyone else still out there who still doesn’t realise that KM needs a budget, here is an introduction.

Why do you need a KM budget?

Because to deliver Knowledge Management requires not only new technology, new processes, new roles and new governance, but also a program of cultural change. A delivery person or team is needed to run the implementation project, they need to be paid and (in larger organisations) to be able to travel to the different offices, and therefore the project needs a budget. You can get a certain amount of the way in KM through goodwill and people volunteering their time, but this is not sustainable. And ISO 30401:2018, the KM standard, requires that Top Management shall be responsible, among other things, for ensuring that the resources needed for the knowledge management framework are available. This includes a budget.

What are the main costs the budget will cover?

Some of the main expediture items will be as follows ;

  • Salaries of the KM team, with their main tasks being 
    • Researching and drafting the KM framework, strategy and implementation plan
    • Developing the change management and communication strategy
    • Delivering early quick wins
    • Working with the business to deliver pilot projects
    • Rolling out the KM framework
  • Travel budget (if this is a global implementation)
  • Purchase of technologies (this should be no more than a quarter of the budget at most)
  • Service of an experienced trusted consultant

How big should the budget be?

Participants in our global Knowledge Management surveys were asked to specify the scale of their annual KM budget. 118 participants (20%) did not know this, and 51 preferred not to quote a figure. The mean KM budget of the remainder of the respondents was $785,000.

Obviously the budget will be bigger the bigger the company, with an average “budget per staff member” of $3000 (although there are economies of scale for large organisations).  The budget also increases as the KM implementation continues, as shown in the figure below.

The graph will give you benchmark figures, but you will need to work out your budget yourself, from the bottom up.

How long will you need a budget for?

The KM budget will be needed for as long as KM is important and is delivering value, which will be for as long as Knowledge is important to your organisation. Even when implementation is over you will need an ongoing “operational budget” for KM, to pay for a team to manage, monitor, and support the application of the KM Framework.

How do you justify the budget?

You do this by knowing what value KM will deliver, and by estimating the “size of the prize.” Then, once KM is under way, you demonstrate the value.

Yes, KM needs a budget, and for large organisations this will be  large budget, but KM should more than pay its way.

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Shared by: Nick Milton

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