The CEO Refresher -

Not-for-Profit organizations are generally resource "challenged" even in the best of times, and the current economic climate has created many new and unique issues and opportunities. Given the pressures on funding, organization stability, sponsorship and possible increased demand for their services, not-for-profits must find ways to do more with less, and have a greater impact with less resources.

Information technology costs are often very important to not-for-profit organizations as they likely represent a major portion of their capital and operating expenses, and can significantly improve an organization's efficiency and level of service. Given the mission critical role of technology in not-for-profits today, the challenge is to immediately be able to do much more, much faster, more efficiently, all with less resources. This article will highlight several best strategies for not-for-profits to save IT costs and improve service in these turbulent times.

How to reduce IT costs intelligently

In a recent webcast sponsored by BMC and hosted by Computerworld, Glenn O'Donnell, Senior Analyst at Forrester and Jim Grant, BMC Senior VP of Strategy discussed three strategies to reduce IT costs "intelligently." Key to their discussion was the notion of moving forward with a roadmap for the long term, reducing operating expenses, improving organization and IT processes and making proactive investments to make IT a differentiator for your organization.

Here are my take-aways from that very informative presentation, sprinkled with learning from other articles and research:

The three main areas of focus to reduce costs and improve performance are:

Outsourcing;
Improve efficiencies;
Improve organization and IT processes.

These three themes weave through most of the following discussion points:

The immediate priority is to reduce operational expenses and service costs, and the largest opportunity is in operational waste. If at least 80% of the IT expenditure is just to "keep the lights on" or to maintain the current level of service, doing more of the same with less resources will undermine your capability and not get you anywhere in the longer term. You must change what you are doing - and major change is in order.

Assess your IT organization structure to improve efficiencies and improve processes. Ensure it is a comprehensive view of the entire IT organization and develop a roadmap and strategy for the longer term. Restructure to support organization processes, eliminate "tech" silos and avoid creating new process silos.

In considering outsourcing avoid "punitive outsourcing" and instead conduct a careful evaluation of outsourcing of as many non-core IT services as possible.

Automate the "automatable," including service automation and self-service throughout.

Consolidate - data centres, service desks, your portfolio of tools, and reevaluate your management tools. Consolidation can result in significant cost savings with dramatic improvements in service performance.

Evaluate your vendor mix and ensure all requisite quality and control processes are in place. Think about a portfolio of vendors like a shopping mall of larger established "anchors" and more focused "boutiques" for special needs and circumstances.

Establish benchmark metrics for service performance and measure them all along the way. You can't manage what you don't measure!

Take a stepwise approach. Have a roadmap for the long term and implement in an incremental way. Incremental execution with clear deliverables and "tight" business cases can minimize risk and maximize impact.

Adapt skills to the new order - and that always means new skills - including IT and non IT related talent to develop the capability to deliver distinctive solutions.

"Doing it right" goes beyond cutting costs. The more mindful objective is to lower operating costs and improve service and performance.

IT impact on organization performance

In a recent study Gartner Research noted that the greatest opportunity for IT to have a significant impact on organization performance will come from resolving two key issues:

1. The capability gap.

Organization expectations for IT have outstripped the internal capability to deliver. Technology has become vital to mission critical business processes and the awareness of what is possible and expected has increased exponentially. Attracting and retaining talent with expertise in all aspects of information delivery is a daunting challenge, greatly exacerbated by limited budgets and the pressures to reduce costs. How will you cope with increased expectations and cost "containment" pressures? What options do you have?

2. How to more rapidly modernize infrastructure and operations, and reduce costs.

We are back to the fundamental need to do more with less. Accelerating modernization is the only way to cope with rapid increases in demand, but is severely constrained by the pressures to improve efficiencies and reduce expenses. The above points on reducing IT costs "intelligently" do provide some direction however, how are you going to "make this so," and get it done, with the resources you have today?

Engage!

Clearly, leaders of not-for-profits need to crystallize a strategy and roadmap for the future to be able to take positive incremental steps today. And then, what of the challenges of the new, new future - more dynamic, interactive and compressed planning cycles; cross-functional decision-making to drive better, faster decisions; smaller, flatter organization groups and subgroups to achieve faster reaction times; more distributed and yet highly connected and collaborative business teams, and so much more we haven't yet dreamed possible.

Do you have a strategy for the longer term? And does that strategy include the elements of - leaner, more resilient, and more responsive. And, how are you going to close the capability gap, reduce costs, improve service and meet the accelerating demands?

There is a better way for not-for-profits

Not-for-profits can immediately close the capability gap to accelerate technology efforts and minimize the risk without a long term commitment or cost, by partnering with a full-service, information technology services organization that has proven experience and is fully conversant with the latest technology innovations.

Engaging an expert partner can provide the needed resources to "intelligently" reduce costs without undermining capability, bring the latest thinking to your strategy for the longer term, and experienced resources for the incremental steps for the immediate and short term.

By developing a partnering relationship with a full services organization you will broaden your resource base and be able to accelerate development. You will benefit from having an unbiased expert perspective for current and best practices and the additional horsepower to implement and manage change.

Best practice in the current economic climate suggests a focus on self-funding projects that are mission-critical and grounded in organization needs and operations. The use of partner supplemented resources directly related to the self-funded project business case ensures the realization of value and return on investment.

Ensure your partner has the capability to respond effectively to your unique needs and opportunities, as opposed to those whose primary intent is to sell pre-packaged proprietary solutions looking for problems to be solved. Proprietary solutions may well be part of the effort to help standardize processes however, the ability to customize to meet your unique needs is a vital consideration.

Also consider a high-impact quick-win approach to IT investments and performance improvement. Target investments in those areas that save costs, increase efficiency, and increase revenue, and execute in an incremental, "bite-sized" way to minimize risk and maximize impact. The article Uncommon IT Sense for Turbulent Times describes several elements of this approach.

To ensure flexibility, agility, high performance and lower costs consider partnering with smaller firms that have the capability and range of technical expertise you require and the speed and responsiveness of a smaller organization and dedicated team.

I would be remiss if I failed to shamelessly promote the organization I am associated with as an excellent example of a potential full service technology partner. T4G Limited http://www.t4g.com/ is a project-based, end-to-end technology services organization, and are experts in ecommerce, web presence, intranet portals, infrastructure, content services, security, outsourcing, business intelligence, and also in integrating legacy systems. Their clients include Canadian Tire, Sears, LL Bean, and Macys, as well as Canadian Opera Company, EthicsCenter, Mount Sinai Hospital, Sunnybrook Hospital, University Health Network and many more. Their trademarked tag line is "the intelligent application of technology."

Challenging times call for creative approaches and perhaps a little "uncommon" sense to be ready to respond to the opportunities ahead! Clearly, not-for-profit organizations that take a more strategic and mindful approach to their IT investments today will save costs, improve service and ultimately emerge more responsive, resilient, productive and relevant.

Thank you for your time and interest. I hope this article has provided insight into several opportunities and best strategies for these turbulent times.