By Chris Moore
A nonprofit without a recently updated business plan & supporting intelligence dashboard is like a boat without its engine and navigation tools. Does your nonprofit have a business plan? Does it have a Business Intelligence Dashboard in place so that you and your management team are watching both leading and lagging indicators of success, and in real time? If you answered no to either question, then your business operations may not be running at peak efficiency and effectiveness. Our services help nonprofits improve operational outcomes so that they in turn can focus on their mission without distraction and interruption.
Approach: What makes us different is that we don’t just begin working with your team and start changing things. Instead, we create business intelligence that supports each aspect of your business plan so you know, in real time, that your business plan is being realized as it was intended. If you don’t have a business plan or perhaps it is outdated, then we start there. After creating or updating your business plan, the organization is ready for the implementation of a Business Intelligence Dashboard (BID). The BID provides key performance indicators (KPIs) that are needed to understand the health of every aspect of your nonprofit’s activities. And since the BID works in real time, you will know when problems exist when they are small so they don’t get out of control and eventually impact mission execution in a negative way.
Why do this? Increasingly, nonprofits are finding that: 1) their fee-for-service revenue is increasing as a percentage of all revenue, 2) Those organizations that make charitable donations want to know that you are running your nonprofit at peak efficiency so that their donation is maximized to its fullest and 3) It gives you a major advantage when seeking additional funding or new customers.
Case Study: Value of Dashboard Information
Current Situation: A national nonprofit receives news that one of their largest financial contributors is changing direction, and as a result they will no longer be a financial donor. The end result is that revenue will decline by 20% for the following year. The remaining revenue is fee-for-service and the organization has a few months to expand operations and make up for the lost revenue.
Strategy: A logical plan was presented to the Board that reflected an increase of new customers to accommodate the lost revenue. The team felt confident that existing staff could absorb the additional work load and address the revenue shortage within six months. The plan was presented to the Board for approval.
The Discussion: An engaging discussion ensued after several questions were asked, “How do you plan on quickly increasing sales? Who are your prospects? Who is responsible for sales and what are their monthly goals? Are the operations of the business scalable to support such rapid growth? What is the utilization rates of exiting human resources and what are the FTE requirements by subject matter expertise to onboard new work? What are the human resource variances of the proposed new organization as compared to the current state? Are expenses well controlled to allow for hiring ahead of the revenue curve? And if not, what is the finance strategy? And most importantly, what does the Business Intelligence Dashboard say about leading key performance indicators of success?”
The Challenge: Leadership realized quickly that they weren’t prepared to fully answer these questions, and their nonprofit needed to act very differently in a 100% fee-for-service model. Before, any financial or service shortcomings were addressed by pulling funds from their financial donor. Now, they have to ensure that 100% of fee-for-service revenue exceeded expenses.
Hypothesis: Before the nonprofit was in a position to expand operations, it needed to answer the questions outlined above. In short, it needed to know:
- How staff time was being allocated in relation to budget (this meant it needed to create a staff configuration plan for all employees).
- What customers were saying about their service in real time (not at the end of the year).
- Was its service model functioning as intended from the perspective of all constituent groups?
Solution: IES was selected to create a comprehensive BID to answer these questions so management could adjust operations when and where necessary. The exercise resulted in 1) streamlining operations, 2) creating data so that 26 business “touchpoints” could be realized, 3) and more closely managing fee-for-service revenue and expenses.
Outcome: Two critical outcomes resulted. First, the nonprofit quickly adapted its operations to work within fee-for-service revenue without dramatically impacting staff. They worked smarter with greater productivity. The second outcome was that the organization was positioned, vie the BID, to scale operations and at any given point in time, ensure that growth was nimble, agile and that any problems were quickly identified and managed.