3 considerations when budgeting for your continuous improvement model

By Roger Price - November 7, 2014


As with any other planned program or function in your business, your investments in continuous improvement (CI) should be included in your operating budget. However, it can be difficult to properly budget for CI investments if you don’t have visibility into the current status of CI across the organization, which is often the case for companies that are using a piecemeal approach to CI management through some combination of Excel spreadsheets, PowerPoint slides, and a file management system such as Sharepoint. A platform solution to CI management will provide the visibility required to make appropriate investment decisions.  In our experience, organizations should take into account the following when budgeting for CI.

What to Consider When Budgeting for Continuous Improvement

  1. Cost to Deploy – For companies that are early in their CI journey and have yet to formally introduce a structured continuous improvement model, Operations and CI Leaders will need to plan and budget for the deployment. Typical budget items include:

    • Leveraged deployment champions - these are internal resources, typically with a CI or functional excellence background, who will introduce the continuous improvement model to the sites.

    • Consultants/journey partner - many organizations will partner with an outside consultancy who can help them to design and deploy their model.  Selecting the right partner, a firm with expertise not just in the CI tools and methodologies, but one who understands how to facilitate a broad-based deployment, is crucial.  Phase 5 Group has a core competence in CI program management.

    • Content Licensing - some companies will choose to license 3rd party content, such as instructional documents and training materials, to support their broad-based CI deployment

    • Travel

  1. Capability building – Most continuous improvement models, at least those that are designed to engage the workforce at all levels, will require a pretty significant investment in training.  Employees need to understand the concepts and  tools that are being introduced if they are expected to apply them.  The organization must decide who is responsible for budgeting for those investments, the corporate operations group responsible for bringing CI to the sites, or the sites themselves who benefit from  the training but  may struggle to absorb the additional cost.

  1. Ongoing Management and Governance – Ongoing  management costs typically reside at both the site level in the form of follow-on training and partial or fully-dedicated site CI resources to support the line-led improvement teams as well as the corporate level through leveraged CI and functional experts to assess operational maturity, provide as-needed subject-matter expertise, and coach the sites through the journey. In addition, for organizations to maintain an effective governance model around CI, it’s important to create visibility into each site’s improvement agenda and the status of committed improvements. Some organizations attempt to do this through some combination of spreadsheets, word of mouth, and file sharing programs. More leading edge organizations, recognizing the value of CI to the business and the necessity of a strong governance model, have started implementing platform solutions that integrate and visualize the status of various CI work streams across the business.

Phase 5 Group’s EON software is exactly such a platform solution.  Companies that use EON have better visibility into the status of their CI deployment and the value it brings to the business with less likelihood of regression.

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