The Good, The Bad, The Ugly

Session C-5

November 12th, 2003

3:30 – 5:00 PM

Lisa F. Rau

Agenda

Introductions The Good The Bad The Ugly

Introductions – Lisa Rau

CEO and co-founder, Confluence (www.confluencecorp.com)– IT services firm providing support exclusively to the nonprofit sector –

most are community-based organizations ~20 years of experience in the IT support services industry Consultant to over 100 nonprofits on technology initiatives Frequent consultant and invited speaker on IT planning, IT

budgeting, fundraising for IT, and IT-related capacity building VP on the Board of the YWCA of the National Capital Area Computer Scientist (BS, MS and Ph.D.)

Peer Reviewer, for MD Nonprofits’ Standards of Excellence Program

Recent and Upcoming Presentations

Lutheran Financial Managers Association, New Orleans, LA, 9/29/03, “Best Practices in Budgeting for and Acquiring IT: A Comprehensive Compendium of Resources, Tools and Tips for Nonprofits”.

National Technology Enterprise Network Regional Conference, Washington, DC,10/23/03. “How to choose a vendor”.

Council on Foundations’ Technology Affinity Group Annual Meeting, Washington DC,11/13/03. “Network Operating Systems.

Maryland Association of Nonprofit Organizations, Columbia, MD,1/15/04. “IT Tools, Tips and Resources”.

Support Center for Nonprofit Management (New York),2/19/04. “Fundraising for Information Technology” (AM) and “Increasing your Internet Presence” (PM).

Confluence Quick Facts

Founded 3/01 by Lisa Rau and Jeff Sullivan:– Certified as a VA Women’s Business Enterprise, and DC LSDBE – Offices in DC (1111 19th Street, NW, Suite 900)

Over 110 customers as of 10/03 Over 25 full time staff and consultants

– Confluence averages two new customers per month– 98% customer retention rate

99% of our work is for the nonprofit sector Customers span ten states with most in DC metro area Confluence rated #6 in Circle of Community Investors at 2002

Washington Business Philanthropy Summit

Services Breakdown

35%

30%

5%

30%

Technology andManagementConsulting

Database andSoftware Systems

InfrastructureSupport

Training

Sample Customers

The Good

The State of Technology in the Sector -- Objective

Grantmakers Information Technology Survey Report. 315 foundations completed the survey in April 2003.   www.tagtech.org

Michigan Nonprofit Technology Survey - information technology perceptions, capacities, and needs of nonprofit organizations in the state of Michigan. Comnet.org/techsurvey

Nonprofits, NTAPs and Information Technology, January 2003. Survey sponsored by N-TEN. www.nten.org/reports

Art & Practice of Technology Consulting Survey Summary (bethkanter.org/consult/responses.pdf)

Gifts in Kind 2001 Charity Technology Tracking Survey Nonprofit Management Fund Software Survey Maryland Association of Nonprofit Organizations Technology Survey Independent Sector: The Impact of Information Technology on Civil

Society: How will online innovation, philanthropy, and volunteerism serve the common good?

The State of Technology in the Sector -- Subjective

The sector is experiencing a “digital divide” The true impact of the Internet is in building community

– Strengthening relationships with current audiences– Reaching out to new audiences– Easy to use interfaces for distributed data input

The effective use of technology will require long-term collaborations with nonprofits, for-profits and funders

Lack of sophistication in IT management, and IT purchasing, employee use of computers and technology (training)

Lack of recognition that IT is an executive function

The Good

How technology works for us Common technology applications and elements of

infrastructure that work well for us:– Commercial software systems – Internal IT initiatives:

Communications Nuts and bolts – desktops, servers, networks, Internet access,

email

Software Applications – “Easy”

Accounting Systems– MIP, Blackbaud Financial Edge, Great Plains, QuickBooks, Nonprofit

Books, Solomon– $15-$20K

Fundraising Systems– Raiser’s Edge, DonorPerfect, Giftmaker– www.npowerseattle.org/tools/donormanagement.htm - Consumer

Guide to Donor Management Software– Free - $30K

Web Site Tools– Web / photo editing tools– Content Management Systems

Payroll systems

Software Applications – “Harder”

Software– Client tracking systems– Case Management Software– Child care management

Strategy– E-Advocacy– Integration – “customer relationship management”

Hard because:– Choice confuses– Expertise is involved that may not be present within agency

Underestimation of totality of project Ensuring path chosen will meet the needs of the agency

Internal IT Initiatives that Succeed - Training

Bring all employees up to common proficiency Continuous to account for new jobs, turnover Increases retention and morale Big efficiency and effectiveness bang for the buck Helps if leadership believes that training is a worthwhile

investment Ensure there is a training budget

– Classroom training ($75 - $500 per person per course)– Custom Training ($500 ½ day) – On-line / web enabled training

Internal IT Initiatives that Succeed - Communications

Communications Concepts– With field offices– To facilitate / enable remote work / telework– To communicate with constituents– Internally among staff

Remote Access Technology - Virtual Private Network (VPN)– Built-in to Windows 2K Server OS (Routing and Remote Access Server (RRAS) –

download preconfigured VPN connection to each remote desktop / laptop– Firewall / VPN appliances

SonicWall / Cisco– Citrix / Terminal Services –

useful for multiple simultaneous connections and application sharing Citrix runs in conjunction with Windows 2000 Terminal Services to include more client platforms,

improved bandwidth, enhanced security, load balancing, etc Remote access to email

– With MS Exchange – use Outlook Web Access– With POP3 accounts, check box in Outlook “leave a copy on the server” and use webhost

email access or www.mail2web.com PC to PC - Gotomypc.com or PCAnywhere

Internal IT Initiatives that Succeed Infrastructure / Technical

Updating hardware & software– Windows automatic updating – download from Microsoft web site– www.microsoft.com/Windows2000/downloads/recommended/susclient/

Organization-wide standardization of systems– Ensure standardization results in savings– Standardization requires standards– Standards comes from top-down

Speed of current hardware vs. cost of upgrading– New computers will last longer then ever before– Anything under 500 MHz is candidate for replacement– Computers are very inexpensive now – Rule of thumb – if cost of upgrade is 50% of more of cost of new equipment,

buy new equipment Exploit warranties and maintenance agreements for all hardware,

software and services

Internal IT Initiatives that Succeed - Security

IT compliance (HIPAA)– Many workshops around this– Many practices devoted to help (i.e., Price Waterhouse

Coopers) Improving IT security

– Perform a security assessment / audit– Develop appropriate policies and procedures

Developing an integrated Information Management System that addresses security and confidentiality; developing IT policies and procedures

Sample Policies

1. ORGANIZATION AND RESPONSIBILITY

Organization Policies Organization of Manual Responsibility for Standards 2. DOCUMENTATION Documentation Policies Project Documentation Applications Documentation Program Documentation RESOURCE MANAGEMENT Requesting Service Service Request Procedure Storage Management Requests for Storage File Management

File Permissions

Employee Training

9. CONTRACTING WITH VENDORS

Policy for Contracting for

Outside Services

Consulting Service Contracting

Contract Personnel Acquisition

10.APPENDICES

MIS Organizational Chart

MIS Job Descriptions

6. MANAGEMENT AUDIT Audit Policies MIS Systems Audit MIS Management Audit 7. HUMAN RESOURCE MANAGEMENT MIS Personnel Policies Recruiting and Job Search Selection of MIS Personnel Testing for MIS Personnel Employment Interview Performance Review Employee Termination 8. MIS EDUCATION AND TRAINING MIS Education and Training Policies New Employee Orientation

The Bad

Overview

Why good projects go bad– Funding– Preplanning / requirements analysis– The procurement process

Integration challenges

Why good projects go bad

Lack of resources Inadequate pre-planning Unsophisticated procurement processes Inappropriate solutions

– Videoconferencing Just don’t Get high-quality speaker-phones and appropriate for use Consider headsets No one calls in from cell phones

Support / Funds - Resources

Would your organization accept a broken:– Phone system / voice mail, copier, Email / Internet access

Money gets spent when it is:– Required

Preventative maintenance prevents wasted money – Prioritized

Need “champion” in organization or a forcing function– Budgeted for

Ensure your proposals and budgets include the resources for upgrades and “keeping pace”

Things happen – may as well plan for them

Capacity Building - Funding

Getting funding requires knowing how much you need and for what Proposals to requesting funds (existing or proposed new) should

demonstrate that the project pays for itself– Qualitative and / or quantitative analysis– If it doesn’t, why do it?

Proposals should frame requests solely in terms of mission– Sometimes still won’t work – i.e., if you need new equipment and they

won’t fund equipment – then try juggling funds– Look at descriptions of grants to see examples

That being said: – IT is not a one-time expense – every organization should have a

budget for it

Pre-planning

The hardest part of any IT initiative is deciding what to do– The how to do it – the technology part – is straightforward

Consultants can help– Forcing function – something wonderful will happen– Methodical –

Big picture view Considerate of organizational implications for any initiative

– Broad and deep knowledge of the state-of-the-art– Expertise on what works – Independent view –

Consultants are often “heard” more than internal staff– Staff open up more to outsiders who guarantee privacy– Second opinion and Unbiased and fresh perspective

Requirements Analysis

The broader the staff input (and potentially board’s) the better the end result

It is OK to state outcomes in functional, not technical terms

Write down the results of your analysis – Prioritize

Incorporate into RFP

Developing a concept of operations

What systems must talk to each other What functions make sense to group into single

products– Familiarity with “market space”

Cost / benefit analysis – Among different concepts– Buy vs. build

It’s only after this process that an accurate project cost can be developed

Two-stage projects are almost always appropriate

The Procurement Process

Request for Proposal Questions and Answers Down-Select to Finalists Interviews Selection Negotiation Project Implementation and Management

Requests for Proposals

The proposals you receive are a direct reflection of the RFP you issued

Provide:– The specific information you want from each vendor, in what order; how

proposals should be submitted, – The evaluation criteria – it should be complete and measurable

What’s wrong with this: “Proposals will be evaluated on all appropriate criteria, including, but not limited to, cost, experience and support offered.”

– Timetable and schedule– Don’t ask for information you don’t need or won’t evaluate – Process for Q&A

Costs should be clear and broken out into tasks / subtasks

Evaluation Criteria

Components to weight:– Capabilities of specific individuals– Corporate Expertise – in this area– References and Prior Experience– Technical approach– Understanding of requirements– Cost

The quality of proposals is often an indication of the quality of the work

Work must be broken into phases with visible milestones Evaluate credibility and reliability first

Questions and Answers

Do not let on who the other bidders are– Use “Bcc” if emailing all vendors at once

All questions should be submitted in writing by a certain date

All questions and all answers should be responded to in writing to all respondents– Ensures a level playing field

Down-select and Interviews

After receiving the proposals– Now it is time for you to ask questions back – give the vendors one

chance to “make it right” CRs (Clarification Request) and DRs – (Deficiency Reports) Price comparison requires apples to apples – low bid is as dangerous as

high bid– Make a matrix with your evaluation criteria in it and score the responses– Get a committee together to make the decision– Consider bringing the vendor in for an in-person interview

CRs and DRs can be handled through this oral process – Make sure the company knows what kind of people to bring

Often, the it is clear who the winner is – – the selection is obvious

Hiring Technical Support – Best Practices

The specific individuals assigned to do the work is the biggest contributor to project success

You get what you pay for The “hourly rate” fallacy

– But how MANY hours at WHICH rate? Is travel time included? Past performance is the best predictor of future success

– Check references – last 5, not their choice– Get resumes for the specific individuals who will be assigned

Look for the real thing – not someone who learned technology on the side

– Academic degrees or technical training– 2+ years on-the-job, relevant work experience

Negotiations

Don’t pass up the opportunity to negotiate– Terms of contract– Price and payment

Develop a web of relationships– Technician and organizational point of contact– Business managers – Executives

Contracts are there to protect your organization– Non-solicitation - Nondisclosure– Insurance - Payment / Billing– Arbitration– Intellectual property / ownership– Escrows– Lock-in future escalations

When you run into problems

Don’t hesitate to surface problems early– Often, the firm doesn’t know there are problems – they aren’t

mind readers!– The best performing vendor is one who thinks they are about

to be fired– Suggest specific fixes – i.e., replace the assigned technician

The hardest decision to make is to cut your losses If outcomes are not achieved you MUST ask whether

to continue Avoid blame and move on – proving fault is very

difficult in IT

Integration Challenges

Your Case Management System

Your Financial System

Server Operating System

2000 2001 2002 2003v1 v2 v2.5 V3

2000 2001 2002 2003v3.2 v3.3 v5.0 V5.4

Windows NT Windows 2003 Server

Integration Challenges

Upgrades and maintenance never end Some systems to be integrated may be beyond your

control The effort to get two disparate systems to “talk” to each

other is a major project in its own right Standards can help

– Association of Information Referral Specialists – “XML” based protocol for data interchange in social services

– Piloted to created regional 2-1-1 systems Mandates can help – Homeless Information

Management System

The Ugly

Intractable Problems – The Ugly

The seemingly prohibitive price What are your organization’s barriers to using IT to enhance

efficiency and effectiveness? Cultural issues

– The difficulty in effecting organizational change required by new business processes

– Other organizational rather than technical reasons Cultural issues are the most difficult problems to solve. Ways to

change culture:– Leadership– Organizational structure– Individuals

The Ugly – Changing Leadership

Difficult problem to solve Organizations tend to exhibit characteristics of their

leaders Consider getting an external assessment

– Provides independent view – 360 is popular– Done by experts – many can act as coaches– Includes a prioritized action plan with budget so its easy to

take the next steps – eliminates being paralyzed– Cost money, so is (for better or for worse) more likely to be

used / paid attention to Wage a campaign / Grass roots effort

– The “surround” theory

The Ugly – Changing Organizations

Organizational structure can facilitate or impede undesirable behaviors– Form follows function

Models of organizational structure– Traditional stovepipe – with departments reflecting

functional / program areas– Matrix model – pool of individuals dynamically

attached to programs as they come and do– Centers of Excellence – identify key areas all

groups draw from for common needs

The Ugly – Changing People / Processes

For the most part, people don’t change– Carrot and stick should work but rationality doesn’t always rule

Over time, new people can infuse an organization with new values

– New employee orientation as vehicle for change Systems must be deployed in organizational context

– Revisit business processes that software can or should change

– Cross-disciplinary teams should be considered– Often in software selection, perform “gap analysis” – gap

between what system does and what it needs to do– Can customize software to match prior ways of doing business

or change way of doing business to match software

Ensuring IT project success

People can thwart even the best conceived IT initiative– Passive resistance– Creating culture of negativism– Active resistance– Change is hard to accept

Job function may be threatened Exposes weaknesses in technical competency

To reduce the risk of people-produced failure:– Include all stakeholders up-front– Let everyone have their say and participate in appropriate stages of

the process– Communicate, communicate, communicate– Set realistic expectations– Train and retrain, provide end user support at highest level

Summary

The Good– Our required software applications– Our basic infrastructure

The Bad– Strategic use of technology to achieve mission– Funding and planning for technology

The Ugly

Contact Information

Lisa Rau– Office: 202-296-4065– Mobile: 703-819-3067– Email: lrau@confluencecorp.com– URL: www.confluencecorp.com