Friday 27 March 2015

How big is a typical KM budget?

As a Knowledge Manager you probably have an annual budget for KM, but do you know how this budget stacks up against other companies? There are no reliable benchmark figures for KM budget, so as part of our 2014 global survey of Knowledge Management, we decided to research this issue. 

The survey participants were asked to specify the scale of their annual KM budget by selecting the nearest figure from a list of figures (in US dollars).

63 participants (20%) did not know the budget, and 33 preferred not to quote a figure. The distribution of budgets for the remaining participants is shown in the picture to the right.

The mean annual budget figure is $950,000 and the median is $100,000.

However the survey was answered by people from a wide range of organisational sizes - from 5-person companies to major multinationals. We need to allow for organisational size before we can really be helpful.

To the right we can see the average KM budget in $US millions for companies of different sizes. As we might expect, the bigger the company the bigger the annual KM budget.

However this is not a linear relationship. Increasing the company size by ten does not increase the budget by ten. There is an economy of scale in KM, plus KM implementation takes longer in larger companies so more annual budgets are spent.

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