How is budgeting for design activities done?


Design is a critical enabler of successful business outcomes at every stage of the business lifecycle. The design needs to be an essential part of any organization’s strategy, including how they think about budgeting. As design becomes more and more central to the running of businesses, it is increasingly seen as a cost-effective way to enable organizations to better compete in whatever markets they operate.

As with any business function, the design must show how it delivers results for the business. However, unlike many other business functions, design is not easy to track because of its intangible outputs. Design typically impacts multiple departments and functions throughout its lifecycle. Design activities can go on for months and involve hundreds of people from different disciplines across an organization.

Therefore, the design must be tracked as part of the overall business strategy and budgeting process. It is also critical to track the success of design activities. In an attempt to align with user needs, organizations often invest in a host of tools and platforms to help them plan, track and manage general design needs.

Why Budgeting?

Creating accurate budgets and controlling costs are essential to any project’s success. Design activities are time-consuming endeavors that require optimal budgeting and planning of various resources. Budgets are usually overriding factors for deciding resources, outsourcing work, and choosing the right tools for the team.

What is Budgeting?

Components for Budgeting 

A well-planned budget affords more tremendous success in building and maintaining creative teams than almost any other skill as a leader. When it comes down to it, showing the business you understand how finances work and the costs associated with running a business quickly becomes critical in getting the approvals you need.

The first step to managing a creative business unit has a solid budget plan! Outside of people management, fiscal management is quickly becoming the responsibility of Design leaders. However, it is difficult to find a budget specifically for creative teams.

Therefore, we are referring to the budgeting template by Matthew Cunningham to help get you started.

People Cost

People are usually the #1 cost for a company. The better you are at budgeting and communicating your people’s needs; you’ll have better results. There are many complexities around budgeting for people, and you’ll use them to plan and share your intentions for the coming fiscal year. And because hiring is hard, it’s good practice to have the plan to work. It may not be 100% accurate, but it acts as a good roadmap.

Buy vs Build / Vendor Cost

While planning design activities, you may need to buy certain services from external vendors or hire people or acquire tools. These are fairly complex build vs buy decisions considering time, strategic intent, and budget available.

Resource/licenses / ToolsCost

This category breaks down all the technology/resources/ licenses or tools the team will need. Design usually requires specialized tools; this tab will help plan for the associated costs. The caveat to this is some companies have their internal IT departments manage the cost themselves. While this is common, IT often charges back the cost to the department. Besides, we all know designers love trying new tools like Figma, Miro, and task management tools, and this section can also be used to account for the cost of ‘testing’ novel technologies.

Travel and Events Cost

This is often overlooked but is an essential part of any reasonable departmental budget. Next to people, events & entertainment can be one of the highest costs a company incurs. And depending on the nature of your work and how many people are in your department, you may need to make frequent cost-related decisions. For things like pre-launch/ post-launch events before launching the product in the market, you’ll likely need to get these recurring events. There are many reasons to ensure you have an event budget.

How important is budgeting to calculate ROI

When you need to do a design activity on a budget, keeping control of the spending is vital to ensure a healthy percentage of ROI (return on investment). 

An easy-to-read budget that communicates the financial requirements meets business objectives, and results in getting what needs to run a successful team.


Cubyts for budgeting

The secret to a thriving creative department has a well-planned budget. A well-planned budget keeps you from having to continually ask for money after the budget has been agreed upon. And that rarely works out. Cubyts, as a DesignOps Platform, empowers you as a design leader to plan your budget well in advance to do the things like add headcount, have the right tools in place, and the ability to develop your staff, is, without doubt, a critical part of a highly functioning team.

As design leadership continues to move up in company ranks, there will come a time when you’ll be asked to provide a budget. And now, at the very least, with Cubyts, you have a head start. Remember, those who have the best plan usually win. For early Sign-up on Cubyts, register here