The Good, The Bad, The Ugly

1. The Good, The Bad, The Ugly Session C-5 November 12th, 2003 3:30 – 5:00 PM Lisa F. Rau

2. Agenda • Introductions • The Good • The Bad • The Ugly

3. 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

4. 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).

5. 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

6. Services Breakdown

7. Sample Customers

8. The Good

9. 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?

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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 Sample Policies 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

19. The Bad

20. Overview • Why good projects go bad • Funding • Preplanning / requirements analysis • The procurement process • Integration challenges

21. 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

22. 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 Support / Funds - Resources

23. 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

24. 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

25. 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

26. 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

27. The Procurement Process • Request for Proposal • Questions and Answers • Down-Select to Finalists • Interviews • Selection • Negotiation • Project Implementation and Management

28. 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

29. 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

30. 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

31. 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

32. 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

33. 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

34. 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

35. Integration Challenges Your Case Management System 2000 2001 2002 2003 v1 v2 v2.5 V3 Your Financial System 2000 2001 2002 2003 v3.2 v3.3 v5.0 V5.4 Server Operating System Windows NT Windows 2003 Server

36. 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

37. The Ugly

38. 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

39. 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

40. 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

41. 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

42. 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

43. 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

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