Crisis Management Series
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[CM] Step 8: Establish a Budget

Organizations tend not to take anything seriously, especially crisis management planning (CMP), unless it has a budget associated with it.


The Organization CM Coordinator must develop a budget and get it approved by the Executive Management early in the process. There are no publicly published statistics on the cost of developing and implementing a CM plan.


I recommend that you build the budget estimate that you present to Executive Management on careful definition and research.

Moh Heng Goh
Crisis Management Certified Planner-Specialist-Expert

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IC_More_Step 8Reaching that financial number requires the CMP project team to define resources and financial requirements, verify their validity, and discuss each with Executive Management.


In Europe and North America, one factor in favour of implementing a CMP program is that insurance companies now provide rebates for organisations that maintain effective premium CM programs.


They eventually may mandate the testing of CM procedures before they issue loss of business insurance due to a business or computer outage.


Insert the insurance savings or potential savings into your budget estimate. Suppose corporate insurance is not applicable in your country when determining a CM plan's budget.


In that case, you should consider the allocation of funds for training and the resources needed to write and test the CM plan. Heighten Executive Management's awareness of the critical business function or IT application systems already in place and assess the backup capabilities required to recover within the allotted time.

Define Resource Requirement

 To accurately define your CMP requirement as part of the budgeting process, you will need to:

  • Define and verify the validity of resource requirements
  • Obtain and validate the estimates of financial requirement
  • Negotiate resource and financial requirements with the Executive Management

The budget amount is first estimated during the Project Management phase. It should include the initial project operating costs, such as attendance at training, engagement of consultants, or purchase of specialized CMP software. The budget is then fine-tuned in the Crisis Management Strategy phase, when details of resource requirements are usually generated.

Provide Realistic Budget

The points to look out for in budgeting are much the same as those for estimating the timeframe. Any increase in the time taken for the CMP project inevitably results in spending more money. Be careful not to fall into the trap of increasing the number of people working on the CMP project to bring it back on schedule.

Putting more people on the job brings with it higher overheads, for example, space, computers, and other equipment, and less productivity per head, at least initially, as the newcomers must be trained and must acquaint themselves with the CMP project.

 Your budget should reflect all the resources required from the start of the CMP project to the end. The budget includes the following:

  • CMP Training (In-house or public courses)
  • Specialized CMP software
  • External consultant
  • Recovery facility and alternative locations
  • Renovation and retrofitting of facilities
  • Upgrading of telephone systems
  • Furniture and equipment
  • Stationery
  • Testing
  • External services rendered to support CMP
  • Travel and education expenses

The budget from the business units includes:

  • Man-hours needed for planning, testing, and maintenance
  • Testing expenses
  • Resource and material costs

Work Within the Budget Cycle

Projects are often stopped due to budgetary constraints. No matter how convincing the business case is, the required expenditure may not be approved if funds for the CMP project are not allocated to the relevant business units' budget.

Therefore, it is paramount that the Organisation CM Coordinator lobby the senior management and the various business units during the annual budgeting process to include appropriate funding for CMP in the upcoming budget.

If the budget was inaccurately developed, you may not get adequate funding or resources to achieve your objectives. Be aware of the corporate budgetary cycle for approval and disbursement of funds. In some organisations, the budget may be carried forward to the next financial year, but in others, it would be removed if it is not spent in that financial year.


CM Project Management Steps

Click to find out more about the detailed requirements for each step

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Goh, M. H. (2016). A Manager’s Guide to Implement Your Crisis Management Plan. Business Continuity Management Specialist Series (1st ed., p. 192). Singapore: GMH Pte Ltd.



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