A manager is reviewing budget materials.

One month into 2021, how are your New Year’s plans coming along? If you’ve started work on your annual plan, your budget is probably on your mind. Below we explore how to approach budgeting for change management success.

Budget with change in mind

First and most importantly, consider how much change your organization has endured during the past year. Then, think about how much uncertainty is ahead of you. Your budget is a road map guiding you toward your goals. Budgets must be adaptable so that you can make changes at any time throughout the year to accommodate shifting priorities. If 2020 taught us anything, it is that resiliency and agility are key for your agency’s long-term success.

Some guiding questions that you may find useful at this initial stage are:

  • What is happening (societally, culturally, or politically) this year that could affect our plans? What is the financial impact of external forces?
  • Are we expecting any regulation changes? How will we allocate resources to comply?
  • How can we develop our unique value proposition in the coming months?

Budget with your people in mind

Your people are the most critical drivers of your change initiatives this year. Your staff will set the tone for what you can accomplish and how. They will create the processes, execute the plans, and help your organization hit its performance goals.

When it comes to staff and budget, two major considerations come into play:

  • Talent and skills. Assess your current workforce. Do you have the right capabilities to achieve change management goals? If not, what is your reskilling and upskilling plan? How will you begin to hire and develop talent accordingly?
  • Budget ownership. You can choose to administer your budget via your organization’s senior leadership with a top-down approach, or by allocating responsibility throughout the employee ranks. The first approach keeps all budget responsibilities tied to a small group of decision makers. The second assumes the entire organization is accountable to achieving budget requirements. Neither way is right or wrong. Consider where power is held within your agency today and how your processes can best support budget ownership.

View technology as a vehicle in your budget

Nothing changes as fast, or costs as much, as technology. Before chasing the latest bells and whistles, be it a new business platform, mobile app, or online solution, think through the following:

  • What is the organizational need? Is this need best met through a new-to-us technology development?
  • If technology could be the answer, what are the budget implications? How much will this tool cost us in terms of hardware, software, implementation, training, maintenance, and support?
  • When does it make sense to outsource technology, and when should we use our internal IT team?

Take your time

This concluding principle brings us full circle. Remember, your budget is a first draft, not a final copy. Build appropriate milestones into your change management plan so that you can revisit your budget to ensure it is aligned with shifting business goals. Most organizations budget on a 12-month cycle. To ensure your financial plan is realistic and offers breathing room for unexpected change, incorporate these principles within your annual timeline:

  • Review your budget monthly and track year-to-date actuals against projections.
  • On a quarterly basis, revise your budget based on monthly trends and re-forecasted projections.
  • Allow space for opportunity and risk, so that costs associated with change do not make or break your agency.

Budgeting for change is one of the most complex responsibilities you will have this year. With these guiding ideas at the forefront, you will be well-equipped to achieve your mission and thrive. If you would like some support along the way, we would like to help. Contact us today to learn more.