Community IT Innovators. Established 1993. Serving social mission organizations with integrated technology services you can trust.

This is Part II of a two-part series on moving from a strategic planning to strategic management process. Rob Jackson is a Senior Consultant with Community IT Innovators.

Strategic management is a logical set of connected activities that enables the organization to make its strategy work. It is a process. It is not the result of a single decision or action. It is the result of a series of integrated decisions or actions that get measured over time.

For the purposes of this discussion, strategic management includes:

• Strategic planning
• Budgeting
• Performance management
• Strategic measurement
• Evaluation

Information Technology (IT) should have a role in all of these functions, and below we explain IT’s role in the strategic management process:

Strategic Planning
While IT professionals are not strategic planners, per se, IT professionals should be members of the strategic planning team and serve as technical resources during strategy formulation. Business strategies must be translated into short term operating objectives, data must be collected and aggregated for analysis against the plan, and eventually IT will be called upon to develop the systems that will institutionalize new attitudes and automate new patterns of behavior within the organization’s information systems.

Budgeting
To realize IT value, nonprofit organization should develop an IT budget with a three to four year horizon. It should include a list of all recurring IT costs related to Personnel, Contractors, Software, Hardware, Data and Telecommunications, as well as any re-occurring costs associated with maintaining the organizations IT portfolio.

The IT budget should be developed holistically with the expected funding levels from all departments, the organization’s calendar, the sequence of projects and respective timelines, and be mapped to the organization’s operational objectives. The organization’s leadership should look for common costs, reduce unnecessary expenses and work collaboratively with the IT staff to align the IT budget with the organization’s strategy.

Performance Measurement
From an IT perspective, performance measurement systems can provide a convenient and expedient method for organizations to summarize and report on critical measures for organizational success, but it is only a piece of the strategic management process. Performance management works to:

• Manage the implementation of agreed upon strategies
• Assess the performance of those strategies
• Reconcile inconsistencies and misalignments
• Formulate new and revised strategies

Strategic Measurement
Similarly, strategic measurement systems can facilitate the collection key performance data, but it is only a piece of the strategic management process. From an IT perspective, it differs from performance management because it:

• Continuously monitors the fit between the organization and the environment
• Tracks external trends and forces that are likely to affect the organization
• Develops information flows that shape internal and external communication
• Provides a clear vision for the type of organization the organization is striving to become
• Creates strategic agendas at various levels, and in all parts of the organization to ensure they become the driving force in all other decision making
• Guides the other management processes in an integrated manner to support and enhance these strategic agendas

Evaluation
From an evaluation perspective, IT must be involved in the process that identifies inputs and codifies all of the observable and measurable targets to ensure data quality. IT can also be used to help the organization track changes in value, condition and status regardless of the type of evaluation being employed.

In conclusion, the successful management of any organization’s strategy depends on the design, use and alignment of these functions to achieve the desired result. So, coordinating workflows, transferring relevant knowledge effectively from one part of the organization to another and achieving integration so as to meet organizational objectives are all ingredients for successful strategic management that can be achieved by using IT strategically.

Seventeen years ago, researchers at IBM concluded that the anticipated value of Information Technology (IT) investment was not being realized because there was a lack of alignment between business and IT strategy.

“IT is transcending its traditional ‘back office’ role and is evolving toward a “strategic” role with the potential not only to support chosen business strategies, but also to shape new business strategies. Yet, there is increasing concern that the anticipated value of the investment in IT is not being achieved … We argue that the inability to realize value from IT investments is, in part, due to the lack of alignment between the business and IT strategies of organizations. We view strategy as involving both formulation (decisions pertaining to competitive, product-market choices) and implementation (choice that pertain to the structure and capabilities of the firm to execute its product-market choices).” — IBM Systems Journal, March, 1993; by John C. Henderson, N. Venkatraman

Within the nonprofit sector, the inability to realize IT value is due to the low priority that nonprofit organizations place on IT strategy. Simply put, IT is not considered to be a strategic asset within the nonprofit sector and the staff that support the organization’s IT functions are rarely involved in the organization’s strategic planning process.

Realizing IT as a Strategic Asset
As the quote above suggests, technology within the nonprofit sector has grown beyond the back office to play a more strategic role within the organization. It has become essential to the successful implementation of strategies that facilitate and improve stakeholder and constituent outreach, data collection, information management, and outcome reporting, yet IT is still not considered to be a strategic asset within the organization. Technology influences the way nonprofit organizations govern themselves, structure themselves, communicate, build capacity, and scale their operations, yet IT is often an afterthought.

In today’s economy, there is a great need to help nonprofits control cost, minimize risk, and accelerate revenue growth. While there are a number of ways to accomplish these objectives, very few nonprofits have a plan that explicitly states the role technology can play in achieving these objectives. As Business IT consultants, we believe that many, if not all of the organization’s strategic initiatives can be enhanced by developing an understanding for what IT can do, setting the appropriate expectations about what IT can accomplish, and executing a strategic plan that is enabled by, and aligned with, the organization’s IT portfolio.

As Business IT consultants, we help organizations understand the possibilities of using IT to effectively achieve its mission, but we also help set appropriate expectations for what IT can do given the organization’s constraints. Yet between the possibilities and the expectations, we believe there is an extraordinary opportunity to help nonprofit organizations successfully execute desirable changes and enhance the capacity for future results by making IT a greater priority within the strategic planning process.

Simultaneous Planning and Doing
Our experience suggests that strategic success demands a simultaneous effort toward planning and doing, and successful strategic outcomes are best achieved when those responsible for the execution are also part of the formulation process. In most nonprofit organizations, IT is responsible for a great deal of the “doing” when implementing the organization’s strategy, but it does not have a prominent role within the strategic planning process. IT can inform strategy formulation during the planning process and begin to align the organization’s information management capabilities with the organization’s strategic objectives.

IT needs to have a more prominent role within the strategic planning process so that it can to help the organization move from strategic planning to strategic management.

This conversation will continue later this month in Part II which details the role of technology in strategic management. Rob Jackson is a Senior Consultant with Community IT Innovators.

Idealware updated one of its most popular articles in answer to the question: What are some broadcast email tools that do work well?

Email newsletters, action alerts, and/or fundraising emails are a cost effective way to communicate with constituents or members. However, it requires a coordinated plan and an organized communications calendar to manage the effort and analyze the effect of sending and tracking thousands of emails. Find out the thoughts of several technology experts on this topic and see what set of broadcast email tools might work for you.

The article includes details about:

• Inexpensive and straightforward emailing tools — Free and straightforward emailing tools that let you send plain text emails to an unlimited number of addresses.
• Online mass emailing tools — Hosted email tools, which typically allow you to manage your lists, create emails and view reports through a Web-based interface.
• Taking a more integrated internet strategies approach — For organizations that are also tracking their constituents’ actions, donations, and their activities on the website, you may need to think through how you track and integrate all this data. This includes considering software that can manage all of your constituent data and activities rather than using a separate broadcast tool. A number of online integrated tools handle a broad swath of internet features.
• Guidance on how to decide — What the important considerations are to keep in mind as you weigh your choices.

Idealware is a nonprofit organization which provides thoroughly researched, impartial and accessible resources about software to help nonprofits make smart decisions about solutions for their business needs. Idealware is aided by a community of experts, including Community IT Innovators’ Dan Shenk-Evans, who is one of their contributing authors.

[Today's post is from guest blogger Steve Goldberg, who is a consultant to Charity Navigator.]

“Nonprofit capital market” is one of the emerging trends in the social sector.  So what is it and what does it have to do with IT?

As I use the term, a nonprofit capital market is a way for donors to “invest in what works” and for nonprofits to secure additional funding by “moving money” rather than traditional means of raising money.  The objective is to create a virtuous cycle in which nonprofits publicize the results they achieve in order to attract greater funding, and greater funding enables nonprofits to further improve their performance.  (Moving money and raising money aren’t mutually exclusive or even, I contend, competitive.  But fundraising will remain the dominant means of generating nonprofit revenue for a good long while.)

How does this relate to IT?  Two ways:  funding for IT capacity development and building the capital market itself.

Like most forms of nonprofit capacity building, fundraising for IT expenditures is extremely difficult (even before the roof caved in on the economy).  Fundraising is based primarily on developing personal relationships with prospective donors and telling engaging stories about the nonprofit’s work.  Results don’t matter much:  effective nonprofits can’t raise funding without cultivating and engaging donors, and ineffective ones don’t lose funding if they’re good at marketing themselves.  (As a result, there’s no incentive for nonprofits to collect or produce performance data; more about that shortly.)

Now, IT can facilitate donor engagement and storytelling through such tools as direct marketing and social networking, but today’s fundraising market penalizes IT spending because it’s overhead.  So nonprofits face a Catch-22:  IT can enhance fundraising, but fundraising limits IT expenditures.  As a result, most nonprofits, especially the more than 90% that raise less than $1 million annually, have underperforming IT systems, with homegrown applications and poorly-designed and poorly-maintained databases.

The social sector and some donors are starting to realize that focusing too much on reducing overhead prevents well-run nonprofits from developing the organizational capacity they need to help more people.  While there’s still quite a long way to go on that front, a more robust nonprofit capital market might help the cause.

Building a functioning nonprofit capital market will require (1) nonprofits that are willing to be judged on their performance (2) to publish useful information about their results and (3) donors who want to maximize the impact of their philanthropy to use that information to influence their giving decisions.  To be useful to donors, the information must be reliable, available and understandable.  If the information is hard to find, confusing or unconvincing, donors won’t care and nonprofits won’t benefit.

Supplementing traditional fundraising with capital-market funding will require significant behavioral and cultural changes for both donors and nonprofits.  As already noted, few donors use performance data to inform their philanthropic decision-making, and it will take time, money and expertise to develop information that donors will find useful.  Moreover, nonprofits are understandably concerned about the risks inherent in performance-based funding, including the expense and effort that will be required to develop robust reporting systems.

This is where IT comes in.  First and foremost, an effective nonprofit capital market needs to produce and distribute meaningful data that convincingly shows donors how their financial support will improve people’s lives.  Nonprofits need systems to collect and disseminate that information at reasonable cost and without disruption of ongoing operations.  They also must be able to show donors how they use metrics to improve performance.  If nonprofits want to grow – and who doesn’t? – they will have to demonstrate not only that they have sound plans for serving more people who need their help, but also that they have the organizational capacity to execute growth plans and manage performance at higher levels of output.

So a nonprofit capital market could help solve the Catch-22 of funding the development of IT capacity.  Many nonprofits would welcome the opportunity to compete for funding based on the results they achieve rather than (or, really, in addition to) cultivating donors.  If technology providers can offer cost-effective, straightforward and reliable applications and systems to measure performance against defined metrics, and help their nonprofit customers distribute that information in user-friendly ways, donors just might look back a few years from now and say, “Can you believe we used to make donations without having any idea of what the nonprofits actually accomplished?”

Steve Goldberg is a consultant to Charity Navigator and the author of Billions of Drops in Millions of Buckets:  Why Philanthropy Doesn’t Advance Social Progress (Wiley 2009).

Project success undoubtedly has different meanings to different people. In the Project Management Institute (PMI) recent issue (Dec 2009) of the Project Management Journal, it is suggested that the criteria for project success is a “group of principles or standards used to determine or judge project success.”

We’ve all heard the classic answer for how to measure project success: time, cost and quality. However this approach has been criticized because quality is ambiguous to the beholder. Quality is a subjective matter that can be interpreted in different ways depending on each project stakeholder’s perspective.

To improve upon the time/cost/quality model there is the project success hexagon model, which includes the following six project success criteria:

• Time
• Cost
• Quality
• The realization of the strategic objectives of the organization that initiated the project
• The satisfaction of the people using the resulting service and/or product
• The satisfaction of other stakeholders

These may not necessarily be in the order of importance. In actuality the ranking of importance for each criteria differs from project to project, and organization to organization.

Considering these six factors at the start of a project, ranking each one and defining what would success look like for each, could be a healthy exercise for any project of significant investment. Revisiting these criteria halfway through the project to re-rank or re-define them may provide a clearer picture of project success as the project process proceeds.

The project success hexagon model is interesting to us in that it widens the criteria to be more than just time or cost and includes in addition the deeper aspects of the purpose behind the project itself – achievement of strategic objectives and satisfaction of the people who are affected by the project outcomes.

Kafi Waters, Daniel Frishberg and Andrew Pendleton worked with Wiley Publishing on this add-on to the Society for Plastics Engineers site, in Drupal http://www.plasticsengineering.org/home
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Monica-Lisa Mills, Terry Brady, Ray Gurganus, and Brian Dunn helped on this new site for the Lutheran Volunteer Corps .

This article on the CIO challenge, by Shawn Banerji for baselinemag.com, is a few months old, but still very relevant to the challenge CIOs and other technology managers face this year. Some key points from the article:

• “Aligning technology resources with business goals” remains a “top technology priority for information officers.”

• IT leaders face “a mandate to reduce information technology expenditures while simultaneously increasing productivity and operating efficiency”

• Budget cuts and scrutiny for 2010 are still expected to be tight, though not quite as severe as most of 2009

• “Building effective third-party partnerships,” strategic sourcing, and effective vendor management are becoming higher priorities as information officers gain visibility and come under more scrutiny

The bottom line? Even if you don’t have an “information officer” or “CIO” at your organization, effectively aligning your IT with your organization’s broader goals and forming a trusted relationship with technology experts and leaders outside your organization can improve your budget efficiency and impact.

For more on what a CIO does and how you can more effectively align your technology with your mission by taking a big picture approach, join us for the next CITIzens Forum on Wednesday, February 3rd at 5:30, or check out our CIO service offering.

Not that recent, but if you haven’t seen these, they’re worth your time:

Playing by the (Wrong) Rules over at Mark Rovner’s Sea Change Strategies blog talks about how some fundraising conventional wisdom misses the larger point.

More bad news over at the NetSquared blog: Nonprofit Marketing Report: Organizations Failing to Connect. It’s interesting in this case that their data is self-reported. This isn’t an assessment from the messagee standpoint that things aren’t clear — the organizations are diagnosing this problem themselves. Which I guess means this isn’t news at all — you already knew.

Finally, here’s a link to the audio of Care2’s webinar Connecting Advocacy to Fundraising. They start off showing some statistical evidence that donations are more likely after advocacy actions. Great food for though and action for all of you out there trying to connect with people on both of those levels.

Are technology projects a source of frustration, confusion, or excessive cost within your organization? Are you curious about whether you’re following best practices and selecting the best tools as you apply technology in your programs and operations? Would you like to meet others solving similar problems and facing similar challenges?

Managing Nonprofit Technology Projects is an event series designed to help you better manage technology projects in your nonprofit or as a consultant to nonprofits.

Aspiration and Community IT Innovators are hosting the fourth Nonprofit Technology Project Management event in Washington, DC on Monday and Tuesday, February 8th and 9th, 2010.

Complete details are at http://www.aspirationtech.org/events/mntp-dc/2010

And you can register directly at http://bit.ly/4q1AgC

A detailed agenda for the event is also available at http://mntp.aspirationtech.org/index.php/Event_Agenda.

The agenda will continue to evolve up to and during the event, as we dialog with participants and strive to meet specific needs in the domain of technology project management for nonprofits. We invite participants to both request and propose sessions.

Informal, information-rich, discussion-based sessions will allow participants to compare processes, tools, successes, and lessons learned. We will discuss areas such as team collaboration, project planning, software selection, migration, and project roll-out, and map out the software tools – from project management packages to collaborative communication to issue tracking and more – that support successful technology projects.

We look forward to seeing you there!

CrisisCamp Haiti is a project of Crisis Commons, an organization that brings together technology volunteers to help with disaster relief and humanitarian crises.  This weekend, in DC and several other cities nationwide, tech-savvy volunteers will be gathering to contribute skills to compile information and resources to help the recovery in Haiti.  Anyone with a laptop and internet-savvy can help, and programmers or those with mapping/GIS skills are particularly encouraged to attend.

View additional details on the January 30th CrisisCamp in DC.