There aren’t many constants in life and even fewer in business. In addition to the constancy of change, I have recently been re-acquainted with the constancy of establishing and securing a budget in effective business process re-engineering projects. So much so that I am compelled to alert anyone with aspirations of renovating how they do business. There is a cost. You have to make some educated guesses as to budget and you have to secure that funding before you lead your friends down the BPM path. Nothing throws cold water on the organizational change process quite like being penniless. We all know buy-in is critical to these efforts. Buy-in is a exercise in rational, logical and emotional agreement. It is also a financial commitment.
This is especially true in the public sector or in organizations that have board control over the budget and financing of new initiatives. Buy-in has to happen at the very highest levels of the organization. Just this week, I watched a client struggle desperately to gain the support of procurement officers who months earlier had made verbal promises. Governments are very sensitive to budget fluctuations so make sure your budget is actually dedicated.
Think in terms of fundamentals. In order to analyze your workflow or business process, you’ll need to gather subject matter experts and at least one executive sponsor in a room and commit some measure of their time. You will need a facilitator. That facilitator may be a paid consultant. You may have analysts in the room. Count the number of people, estimate the number of hours each process re-design might take (a good guess is better than no estimate) and multiply by your best guess of hourly costs. Guess high.
Now consider the hours associated with conducting time studies, observation of work, coding any changes in the systems your people use. There are hours to calculate on behalf of managers, analysts, IT staff and line staff.
Next, assuming you want to test any new process, you will probably have to estimate the cost of parallel processing (running the old and new side-by-side) while you’re testing. This could take weeks or months depending upon a number of factors.
Lastly, if you expect to acquire and implement a new system of one kind or another (assuming your process re-engineering project is dedicated to automation), factor in as many of the implementation costs as possible. You simply cannot afford not to estimate high.
Failure to calculate all of these costs will cost you in the end. An unrealistic budget and cost over-runs are the shortest route to having your project unplugged by finance and procurement. Can you blame them?
Secure the funding
Once you have a budget, secure it. Securing a budget means you have the money. It doesn’t mean someone told you “you’ll have it” or “go ahead, don’t worry” or anything else approximating security. Promises and good faith pledges don’t quite cut it. Your executive sponsor needs to step up to the plate and secure the funding. The consequence of a failed BPM or workflow re-engineering project is the solidification of cynicism in your organizational culture where change is concerned. Renewing these efforts in the future will be extremely difficult given how much “buy-in” you have to secure in order to be successful.
I feel so badly for well-meaning teams of change agents who suffer the consequences of failed budgeting. Months of meetings challenging institutional beliefs, hours spent analyzing and designing solutions. Change is hard work and comes at the expense of business as usual. Getting 80% of “the way there” only to find out the financing for the final 20% isn’t available is a painful blow to morale and innovation.
If you need help with budgeting, ask your finance people. Ask peers in your network for the budgeting tools they used for their project. Call a consultant. Get some help somewhere. Budgeting is not second-nature for analysts, operations managers and IT folks. Ask for help and remember that buy-in really involves making a purchasing decision.