The Role of Technology in Managing the Operations of a Nonprofit

Kelly Bleach – American Foundation for the BlindPeggy Duvette – NetSuite Social Impact (Oracle) – @PeggyDuvette

Steve Heye – NetSuite Social Impact (Oracle) @SteveHeye

HASHTAG #17NTCoperations Collaboration Notes Link: http://po.st/17NTCoperationsMarch 2017

Time to buildUse the Legos to build a car.

Improve our Legos?What could we do to solve our problem in building the final car?

Define OperationsWe 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 votesWrite in vote for

“Transformation of resources to

meet mission, efficiently”

What is the purpose of Operations?

StrategyBudget

Performance

Outcome Driven -

What you care about has to be

articulated in terms of impact

Drive Plan

PolicyManagement

Data

Govern and drive the structure and

controls across organization

Administrate

PeopleProcess

Tools

Manage activity across

organization

Manage

LegalReporting

Finance

Table Stakes – CFOs of today expect FP&A

(financial planning &

analysis)

Comply

Peggy DuvetteDirector 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, PMPChief Business Officer

American Foundation for the Blind

• 30+ years nonprofit operationsexperience

• Oversees finance, facilities, information technology, web development,

& product fulfillment• Certified PMP “for the fun of it”

Steve HeyeSolution 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

Role of the Strategic Plan

Strategic Plan

• Sets the direction

Operating Plan

• Outlines “how”

Budget • Resources available

Tools:Policies

ProceduresProcessSystems

Mission-Vision

Goals for Depts.

Progression

– this is a gradual process

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

Decide what to change - examples

Simple Complex

Use Internal Resources

Pro Bono or Volunteer (Taproot)

Consultant

External Assessment

Audit

Intern

Fellowship

Bookkeeping System

OPERATIONS DEBT DATA

Organization needs

Work Around Spreadsheet

This other free tool we foundWork AroundSpreadsheet

Online Tool

Spreadsheet to pull spreadsheets together

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.

Scale Operations Continuously

2014

2014

Program Growth Back Office Growth

2016

2015

2016

2015

VS

Strategic Plan

Program Growth

Evaluate Operation

s

Scale Operation

s

Modern Finance/ERP System

Organization needs

FINANCES – START SIMPLE BUT ON A PLATFORMKeep 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

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!

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

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

AFB’s ContinuingJourney

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

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?

Data-process-system

Plan tracked with FinancialsBudget

Financials shared with

staffBudget

Vs Actual

All staff use resources

wiselyDecisions

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

dataSet KPIs- Metrics

Adjust Operating and

BudgetAdjust

So what can we do?

Scale Operations Continuously

Evaluate In-House,

Outsourcing and Automation

Balance Sophistication

and Simplification

Change Management

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

Examples In-House, Outsourcing and AutomationNew 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

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

CONNECT DOLLARS TO OUTCOMES

WorldVision, 2016

NonprofitERP like NetSuite

• Real Time• Link financials to outcomes• Manage to the mission

That investment generates around70 cents worth of grants anddonated 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

DevelopmentExperts

DisasterReadiness

DonatedGoods

ReliableSystems

Fundraising &Administration

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

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

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 Bleachkbleach@afb.net

Peggy Duvettepduvette@netsuite.com

Steve Heyesheye@netsuite.com

The following slides are extra information we didn’t have time to present but wanted to share

So why don’t we think about this more?

Knowledge

• Expertise• Skills

Fear

• Experience• Risk

Status Quo

• History• Comfort

No Urgency

• Not broken• Hidden

BALANCE SOPHISTICATION AND SIMPLIFICATION

Simple Complex

Specialization

Unique Process

Levels of Management

Basic

Best Practice

Is it mission critical or mission

impact?Is it a common process or challenge?

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.