ABSTRACT
This chapter reviews some basic concept and approaches to budgeting for L&D projects. It discusses considerations associated with collecting financial data for creating the project budget. It also examines the various ways of planning for cost management once the project business case has been approved. All organizations – for-profit, non-profit, government – have budgets and, thus, engage in the budgeting process. Budget derivation refers to the basis on which a project budget is constructed and that basis is either bottom-up or top-down. Building a budget requires estimating the costs of everything required to complete the project. An organization's decision-makers tend to approve business cases based on the compatibility of the proposed initiative with the organization's goals and strategies. The five most common methods for L&D initiatives are cost avoidance, cost-benefit analysis, break-even analysis, net present value, and return on investment.
