The Role of Technology in Managing the Operations of a Nonprofit #17ntc
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Leadership must change how they manage operations, which will require the right technology, and tech teams must change how they work with the organization to impact operations. This session will look at how to manage these shifts. As nonprofits grow, spreadsheets and workarounds ease the growing pains, but at some point they just aren’t enough. The challenge only increases when a nonprofit waits too long to address the problem, building up an operations debt requiring massive changes. But not all hope is lost—it’s possible to plan for upcoming needs and implement systems before needing a major fix. Nonprofits typically face these operational challenges one at time, implementing a solution for each problem. But this approach builds numerous disparate systems that create data silos, limiting access to information and forcing manual processes between teams. A more purposeful approach to policies, staff, systems, processes, and change management, as a collaboration between leadership, IT, and operations, is critical. This session presents both the leadership and IT perspectives. Everyone can benefit from hearing how leadership sees these challenges versus how IT sees them. You will learn about initial steps you can take today to prepare for organizational growth tomorrow as a team effort.
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The Role of Technology in Managing the Operations of a Nonprofit #17ntc
- 1. The Role of Technology in Managing the Operations of a Nonprofit Kelly Bleach – American Foundation for the Blind Peggy Duvette – NetSuite Social Impact (Oracle) – @PeggyDuvette Steve Heye – NetSuite Social Impact (Oracle) @SteveHeye HASHTAG #17NTCoperations Collaboration Notes Link: http://po.st/17NTCoperations March 2017
- 2. Time to build Use the Legos to build a car.
- 3. Improve our Legos? What could we do to solve our problem in building the final car?
- 4. Define Operations We took a survey to see how people defined operations: • Managing resources directed to programs – 0 votes • Managing day to day activities of organization – 3 votes • Administration of business practices to create efficiency – 0 votes • All of the Above – 5 votes • Managing resources directed to programs and Managing day to day activities of organization – 2 votes Write in vote for “Transformation of resources to meet mission, efficiently”
- 5. What is the purpose of Operations? Strategy Budget Performance Outcome Driven - What you care about has to be articulated in terms of impact Drive Plan Policy Management Data Govern and drive the structure and controls across organization Administrate People Process Tools Manage activity across organization Manage Legal Reporting Finance Table Stakes – CFOs of today expect FP&A (financial planning & analysis) Comply
- 6. Peggy Duvette Director of Social Impact NetSuite – Oracle • 15 years nonprofit tech experience • Wrote Chapter 6 in Nonprofit Fundraising 101 • Previous job was ED of WiserEarth • Failed many times with tech implementation Kelly Kern Bleach, PMP Chief Business Officer American Foundation for the Blind • 30+ years nonprofit operations experience • Oversees finance, facilities, information technology, web development, & product fulfillment • Certified PMP “for the fun of it” Steve Heye Solution Consultant Social Impact NetSuite – Oracle • 20 years nonprofit tech experience • Wrote Chapter 1 in Managing Technology to Meet Your Mission • Previous job was Manager of Technology at The Cara Program • Taught Windows 3.1 at one of his previous jobs Perspective IT & FinanceOperationsExecutive
- 7. Role of the Strategic Plan Strategic Plan • Sets the direction Operating Plan • Outlines “how” Budget • Resources available Tools: Policies Procedures Process Systems Mission- Vision Goals for Depts.
- 8. Progression – this is a gradual process
- 9. Decide what to change Things to review • Processes • Structure • Governance • Policies • Systems High Level Strategy • Impact Analysis • Balanced Scorecard • Gap Analysis Simple Tools • ROI • Benefit Analysis • Audit • Assessment
- 10. Decide what to change - examples Simple Complex Use Internal Resources Pro Bono or Volunteer (Taproot) Consultant External Assessment Audit Intern Fellowship
- 11. Bookkeeping System OPERATIONS DEBT DATA Work Around Spreadsheet This other free tool we found Work Around Spreadsheet Online Tool Spreadsheet to pull spreadsheets together
- 12. OPERATIONS DEBT DATA 2014 2014 Program Growth Operating Systems 2016 2015 2016 2015 As our programs grow we adjust and scale our processes, systems and plans to manage them. But as our operations reporting and tracking needs grow we look for work-arounds and push to stay in the same system as long as possible. This leads to a major project to replace it.
- 13. Scale Operations Continuously 2014 2014 Program Growth Back Office Growth 2016 2015 2016 2015 VS Strategic Plan Program Growth Evaluate Operations Scale Operations
- 14. Modern Finance/ERP System FINANCES – START SIMPLE BUT ON A PLATFORM Keep Records • Track income and expense • Simple lists • Daily Transactions Reporting • Compliance • Basic Statements Starting simple in a cloud platform will allow you to scale, even if you only use base functionality to start
- 15. MIND & MELODY – NETSUITE.ORG GRANTEE Bookkeeper Role • Track income and expense • Simple lists of daily transactions Reporting • Compliance • Basic Statements Tools • Excel http://www.mindandmelody.org/ Staff Overview • No paid staff, 3 key leaders (tech savvy - virtual team), volunteers are key • Basic financial skills Mind & Melody is a 501(c)(3) organization focused on using music to improve the lives of people experiencing dementia and other forms of memory loss. We create and implement interactive music programs at healthcare facilities across Florida!
- 16. MIND & MELODY – THE CHALLENGE Bookkeeper Role • Track income and expense • Simple lists • Daily Transactions Reporting • Compliance • Basic Statements Tools • Excel Challenges: • Limited analysis & depth of detail • Not real time • Lack of access & visibility to staff-board • Isolated from other data • Relies on manual processes
- 17. MIND & MELODY – THE SOLUTION Financial Management • Customizable Accounting • Full budgeting process Reporting • Financial Statements • Real time dashboards Tools • NetSuite Benefits: • Formal reports builds credibility for us, telling our donors “This is not a side job” • Stronger financial insight & understanding • Allows collaboration for virtual team • Ready to scale for org growth
- 18. AFB’s Continuing Journey 2005: still used a DOS based accounting system 2013: migrated order-processing away from warehouse 2015: customized CRM to manage donor database 2006: implemented MS Dynamics Navision 2010: switched to NetSuite accounting platform 2017: key relationships initiative integrating vendors, customers, and donors
- 19. Operations Systems Reality • How do I convince management and board to invest? • Where does the money come from? • How do I invest in a system but not increase my overhead ratio? • Where do we get the skills and tech to manage the system? • Where do we find the time?
- 20. Data-process-system Plan tracked with Financials Budget Financials shared with staff Budget Vs Actual All staff use resources wisely Decisions Plan tracked in PM tool Operating plan Set milestones and goals Project Manage Progress toward goal measured Work the Plan Stored digitally Strategic plan Measure changes with data Set KPIs- Metrics Adjust Operating and Budget Adjust
- 21. So what can we do? Scale Operations Continuously Evaluate In- House, Outsourcing and Automation Balance Sophistication and Simplification ChangeManagement
- 22. Evaluate In-House, Outsourcing and Automation In-House • Builds org capacity • Allows shared roles Outsource • Deeper expertise • Best Practices Automation • Scalable • Dependable • Limited expertise • Single Point of Failure • Lose some control • Cost • Need to maintain • Needs consistency
- 23. Examples In-House, Outsourcing and Automation New Org Grows Expands Human Resources Single Exec staff person does multiple roles Outsource payroll & HR, hires office manager Hire HR team, buys HR software, outsource payroll Technology Single Exec staff, free hosted tools, volunteer helps One IT staff to keep things running, outsource rest Tech team, automated support tools & integrated solutions Finance Single Exec staff with spreadsheets and an outside accountant Simple system with a bookkeeper and outside auditor Integrated financial management with CFO Data Systems Excel, assortment of free tools and maybe a database Multiple systems for functional areas Centralized data analysis and business intelligence
- 24. What does it look like on a day to day basis to track your operations in a system? youth programs which tracked daily participation -- since the strategic goal was to divert youth during the high crime after school hours -- the linkage between recreation capacity & strategic goals (crime reduction) was fairly simple. - David Geilhufe Client demographics in case management system to measure if demographic trends are consistent with service delivery & funding priorities. – Ken Montenegro membership goals / tracked via BI website - John Merritt We track the number of each type of client interaction, fee for service revenues, types of clients served, etc. - Cindy Leonard A local Kids Museum measures daily visitor stats and tracks their strategic growth goals. They have POS system that's connected to their membership system to correlated tracking of members benefits – Birgit Pauli-Haack We (an ESOP not a non-profit) track progress toward strategic goals at our business unit level. We set annual goals, but reevaluate quarterly based on changing business objectives and environment. We don't have a unified goal management system as a company but delegate responsibility to each business unit and team to operationalize their work. - Matthew Eshleman 70% of the survey respondents said they had been successful leadership team (as a staff or board member of an NGO) to invest in an operational system
- 25. CONNECT DOLLARS TO OUTCOMES WorldVision, 2016 Nonprofit ERP like NetSuite • Real Time • Link financials to outcomes • Manage to the mission That investment generates around 70 cents worth of grants and donated goods. So about 40 cents invested becomes around 70 cents in care for children and communities. The bottom line? Every $1 you donate = $1.30 in impact 175% return Development Experts Disaster Readiness Donated Goods Reliable Systems Fundraising & Administration
- 26. Tools Avoid the stack of individual solutions (when possible, but look to integrate back when you can’t) Find a platform (like NetSuite) to centralize your data and operations Operational Needs • Project Management • Expense Reports • Timesheets • Budget • Forecasting and planning • KPI – performance reporting
- 27. So what does this solve • More visibility to financials • Track progress on goals and impact • Drive better strategic planning and budgeting • Save time and allocate appropriately • Stronger information for Boards to drive high level conversation • Reducing the gap between the Board and Operations Operations Dollars to Outcomes Data Informed Decisions Change Management Transparency Increased Sustainability through Data Informed Decisions Strengthen donor support through transparency Increased Program Effectiveness by tracking dollars to outcomes Harmony across departments through Change Management
- 28. Thank you, please take the survey! • Session Specific Hashtag: #17NTCoperations • Collaboration Notes Link: http://po.st/17NTCoperations • Session Evaluations: http://nten.org/17ntc-evals/ Kelly Bleach kbleach@afb.net Peggy Duvette pduvette@netsuite.com Steve Heye sheye@netsuite.com
- 29. The following slides are extra information we didn’t have time to present but wanted to share
- 30. So why don’t we think about this more? Knowledge • Expertise • Skills Fear • Experience • Risk Status Quo • History • Comfort No Urgency • Not broken • Hidden
- 31. BALANCE SOPHISTICATION AND SIMPLIFICATION Simple Complex Is it mission critical or mission impact?Is it a common process or challenge?
- 32. Balance the Strategic and Operations Figure 1: Stephen R. Covey's Time-Management Matrix from The 7 Habits of Highly Effective People, New York: Simon & Schuster, 1989, p. 146.
Notas do Editor
- Steve
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- Steve Explain how legos are like operations: -if we had set a budget, we could have worked to ensure there were enough blocks for all parts -I also gave you no information about what we are going to use the car for- which is like a strategic plan -and finally when we get ready to take our care toward our mission, we will need to plan the journey, which is our operating plan
- Steve
- Steve – Kelly - Peggy This slide should be photos of the three presenters. Do a poll of who is in the room. Do you most identify with leadership, operations or tech-financial? Something about how leadership – board needs an organization overview Fundraising needs donor-donation, revenue Program needs outcomes Finance needs to balance expenses against revenue Tech needs to provide the systems
- Peggy In utopia you start fresh and have all of these elements, but in reality…. Road analogy – strategic plan is our destination-direction. Operating plan – the map, where you stop, gas used. Budget - spend
- Kelly You inherit. We are all at different points in our planning process. Strategic plan-budget-goals already exists. We are all at different levels, size and expertise. So you have to tailor this to your org. This is all about Where you are Understand your role Where you want to be How to get there Simple gap analysis Don’t get overwhelmed. Pick somewhere to start, refine your focus.
- Kelly Don’t get too stuck on identifying the negative, lose sight of adding benefit
- Kelly, Peggy, Steve Deloitte example Taproot WiserEarth Fellowship Intern Consultant Let me tackle one thing – don’t get overwhelmend Ask the crowd for a few examples
- steve To illustrate this challenge other way, think about the systems we use to run our operations. Nonprofits will often settle for a bookkeeping system like QuickBooks or an Excel spreadsheet to manage their finances. Then over time as new needs arise beyond the bookkeeping system a workaround is added. For Mind & Melody, they had to track background checks for volunteers, but the volunteers give the fee to the org and then they paid the company for the background check. But it was critical to track the flow of these funds. This simple process was one of a few requiring manual processes and were tough to report on. For others it starts with a simple spreadsheet for allocations, grants or a donor list. Then another tool is added for online donations. Then another for online bill pay. Then another, then another. By this point though it gets harder and harder to leave the old systems, it is just too much work. Add this to the facts that Nonprofit finances are complex, funds can’t be mixed which gets interesting with more revenue streams come or if there are earned revenues or grants.
- Steve The problem with the overhead myth in this example is the pressure for this to not invest a solution to address these issues, that would be an overhead waste. Many organizations focus their efforts, systems and budget on programs and mission, but may neglect their operations. Over time the scope and scale of the organization outpaces the operations, creating a large gap to be filled by a major project. As this gap grows, no one wants to touch, move or mess with the accounting software out of fear of breaking it because of the related workarounds.
- Steve
- Steve One of the premises behind why NetSuite started NetSuite.org and why many other technology companies have similar programs is to get powerful solutions in the hands of nonprofits early to allow them to start with a solid foundation. But there are other barriers than price to adopting a solution which will allow scaling. These solutions require time and skills.
- Steve Lets look at Mind & Melody as an example. They were founded in 2014, are run by a small team and operate on a minimal budget. Volunteers are a key to their program. Acting as a smart, tech savvy team, the first couple years they pulled together spreadsheets and enough tools to build a solid starting point for the org. This org is like so many other orgs, operating on a small budget where even the IRS filling fee radically impacts the overhead ratio.
- Steve Even though they were stable and growing, they struggled to report their financials to their board in a meaningful way to build credibility and grow support. The orgs budget and financial activity was hard to present to their board and was easily misunderstood. The team had to spend time explaining and reviewing the reports each meeting. Most of the activity was focused on managing today and reviewing historical finances. The team was aware of the challenges though and decided to act now while the org was still smaller and starting out.
- Steve For Mind & Melody, they decided with their tech-savvy staff, now was the time to move to NetSuite while their finances were simple. When talked to Mind & Melody about what has changed since they moved to NetSuite, they said they finally feel like their financial and budget reports show that “this is not a side job” for them. The org is building credibility with financial transparency and has a stronger understanding of their funds. They feel like moving their financial management to the cloud has really setup their small, virtual team to scale and grow the org.
- Kelly Overview of org What were the challenges? Using an older finance system-went to dynamics Due diligence in the selection Where did you start? How did you pick the next projects? Where is it now?
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- Steve, Peggy, Kelly
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- Kelly talks about
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- Or maybe at end to wrap up Peggy
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- After operations systems reality
- Tools, Process, People Data Systems