The Importance of Planning Now
Budgeting to make sure your MBE efforts are on the corporate radar is an important step in the planning process. Today, Michelle Nordwald, COO at Action Engineering, explains key points of this process and how companies can both streamline and strategize their proposals as well as their contracting process.
Do people come to Action Engineering at different budget stages?
We typically see two budget types – bigger, strategic budgets (established efforts and long-term MBE planning) and smaller, tactical budgets (needing buy-in and short-term planning). Most budget planning takes place in Q3 for companies whose fiscal years start October 1 and January 1.
The companies who are forecasting for their next fiscal year need long-term planning support and generally have an in-depth understanding of the multi-year nature of MBE implementations.
We get quite a few companies who have room in their existing budget for the current fiscal year. Typically, this is used for training and MBE Starter Coaching. This type of company needs to get initial buy-in or dip their toes in the water before they can secure funding for a longer-term initiative. These companies often start with the Executive Pitch, so they have a set of slides and messages they can take up the chain.
What is a key point you wish companies knew when at the beginning of their MBD transition?
Leaders are often surprised by the dedicated time needed from the individuals on their internal MBD team. We will coach their MBD team, but the team needs to put in the work to be successful. We want them to have the skills and own the process, which requires a thought-out plan and strong communication.
What are the three things you wish people knew before they start figuring out their MBD transition budget?
First, MBD is a long-term investment. Working with us helps them develop a strategic roadmap, to understand the long-term plan. MBD transitions are multi-year iterative efforts. We don’t recommend taking a shotgun approach. Successful companies budget incrementally, and they know they that it takes time to achieve their MBD goals.
Second, we want them to involve a cross-functional team for budget purposes as well as change management. Many MBD efforts start in Engineering. We encourage them to get Manufacturing, Operations, Quality, Business Systems or IT, Supply Chain, and Management on the team from the get-go. Their processes and people are disrupted more than Engineering, in many ways. They need to own it, or they won’t make the change. And by sharing ownership from the outset, budget resources are spread out as well, lessening the burden on individual teams.
Third, ROI is hard and unique to each business. We can’t share metrics easily from other companies because most of our customers think of MBE as a competitive advantage and don’t want to share what worked. The best way to get ROI data is to have good data on how efficient (or inefficient, as the case may be) things are now, so we have something within a company to compare against.
How does roadmapping with Action Engineering help with their budgeting? And how is the incremental approach helpful for budgeting?
Roadmapping helps companies understand the long-term and organizes the budget into more manageable chunks. For example, tools evolve. We are tool agnostic, but we have experience that helps with tool decisions. We don’t want clients buying tools before they have done a pilot and understand what they need the tool to do and what the users of the tool are expecting. Once they have done an increment or two, they will have a better sense of where to invest, including: organizational change management, pilot programs, and software tools. And I tell them “don’t let the size of the transition keep you from getting started.” Ask us for help figuring out what to do first:, we can accommodate budgets from tens of thousands of dollars to multimillion dollars.
Many times, companies come to us when they’ve tried a few things, or they have a pocket of practice that they need to take to a wider audience in the company or with suppliers, and they aren’t sure how to make that leap. So, I don’t want them be afraid to have us help lay the groundwork for adoption or expansion of existing MBE initiatives. There’s no shaming here! This is so complicated; it is really hard to get all the pieces working the first time.
How much time should they expect a project to spend in purchasing/contracts?
Usually, the purchasing and contracts process takes one to two months. Engineers often underestimate the procurement process and come to us very late in their planning, when they already have deadlines approaching. The contract review process takes time, because companies are sharing their data with us and we need to do that in a safe and fair way.
What do you like about being a part of the budgeting and proposals process?
Oh, this is easy! I love imagining what their company is going to accomplish with MBD. The individuals who reach out to us are already convinced about benefits of MBD. Working with Action Engineering means that our social science experts and technical gurus will help them gain MBD traction within their organization. Taking the first step to “do MBD” can be hard. We preach the power of incremental wins so teams can see results right away. It’s fun to be in on the beginning of that journey and help lay out the strategy financially.
No matter where you are on your MBE journey, we can help. Contact us today to schedule a meeting.