Wednesday 13 August 2014


Yes, KM needs a budget


My colleague Rupert was in a KM workshop last week with a client, and raised the issue of "KM Budget". One of the people in the room said "What? Does Knowledge Management need a budget?" 


Rupert 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 team is needed to run the implementation project, and the project needs 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 survey were asked to specify the scale of their annual KM budget. 63 participants (20%) did not know this, and 33 preferred not to quote a figure. The mean KM budget of the remainder of the respondents was $950,000.

Obviously the budget will be bigger the bigger the company, with an average "budget per staff member" of $1600.  However the relationship between budget and size is not linear, as shown below.

Organisation size (# of staff)KM budget per staff member
Tens of staff$10,000
Hundreds of staff$650
Thousands of staff$650
Tens of thousands of staff$80

These are the 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 greatest during the implementation phase, but even when implementation is over you will need an ongoing "maintenance budget" for KM, to pay for a small team to manage, monitor, and support the application of the KM Framework.

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