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.

[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.

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.

There are a lot of interesting nonprofit technology events coming up in DC in the next few weeks:

• Wednesday, Jan. 27, InsideNGO Technology Update: Inside NGO will be presenting a full day course detailing four technologies. CITI’s Matthew Eshleman will be presenting on Voice over Internet Protocol (VoIP).  Virtual collaboration and training, Windows 7 deployment, and WAN optimization will also be covered.

• Wednesday, Feb. 3, CITIzens’ Forum: The Value of a CIO Perspective: The second forum in our series asks, who is managing technology at your organization? Do you have one person  who takes a big picture view, or are different people responsible for managing your network, website, databases and applications?  What’s the difference between a CIO and a CTO? Join in an open discussion to share what you’re doing and how other organizations address similar challenges.

• Monday-Tuesday, Feb. 8 – 9, Managing Nonprofit Technology Projects: Our second conference partnering with Aspiration to help you better manage technology projects in your nonprofit.  See this post for additional details

• Wednesday, Feb. 10, NTEN Webinar: Greening Your Nonprofit’s IT: Find out what all the green IT buzz is about and get practical information for greening your IT infrastructure.  Matthew Eshleman will be presenting with Peter Campbell on virtualization; other breakout sessions will cover green IT strategy, hardware and software, case studies, and sustainable design and printing.

• Friday, Feb. 12, Nonprofit 2.0: This unconference will let participants shape the agenda around how nonprofits use the latest technology to communicate, fundraise, and organize and advocate for their issues.  The event is already sold out, but there is a waiting list, and there may be a conversation or two to follow on Twitter…

• Wednesday, Feb. 17, CITIzens’ Forum: Salesforce: Learn how organizations are using Salesforce as a powerful CRM to manage contacts, campaigns, and related data; find out how Salesforce could be helpful for your organization, and share your story if you’re already using it.

The following article, by Washington Business Journal Associate Editor Timothy Burn, appeared in the December 11th, 2009 issue of the Washington Business Journal.

Exec helps nonprofits do more with technology

Like a true entrepreneur, Rob Jackson has used his career to identify a need and find ways to fill it. After spending some time at the See Forever Foundation/Maya Angelou Public Charter School, Jackson realized nonprofits need help making the best use of technology. Now he is vice president of business development for Community IT Innovators (CITI), where he helps nonprofits use technology to fulfill their social missions, and do it in a sustainable way.

What’s at the top of your ‘to do’ list?
First, build greater awareness for the strategic value of IT in social-mission organizations. Right now, IT is considered to be a cost center that plays several different tactical roles as opposed to a strategic business driver for the entire organization that requires an informed investment. That needs to change. Second, in order for IT providers like CITI to help social mission organizations make the transition into strategic IT, we need to spend more time talking about the organization’s business objectives with leadership. Third, build greater awareness internally among the staff about the business value of IT.

What’s the biggest challenge CITI clients face right?
Learning how to become more efficient in order to mitigate the well-publicized funding challenges. According to the Foundation Center, giving in 2009 will most likely finish down about 10 percent from 2008, and it’s expected to be down a little more in 2010. So, for the smaller organizations that we serve who have traditionally been asked to do more with less, it will be even more difficult to provide the administrative and professional services capabilities necessary to perform their work.

Many area nonprofits have had to tighten their belts. Has that hurt CITI’s business?
Our growth slowed earlier in the year, but we have been able to diversify our client base and identify new opportunities so that the effect of the downturn has not been catastrophic.

What do you think will be the next must-have IT capability for nonprofits?
With scarce resources and greater accountability standards, social-mission organizations will request information systems that can provide real-time, on-demand access to management information. So, defining the organization’s performance metrics, collecting the data, aggregating, analyzing and publishing the data using Web-based technologies is definitely going to be a must-have.

Can you explain CITI’s “triple bottom line” business model?
People. Planet. Profits. We measure the health and wellness of the organization by measuring individual goals, employee morale, and the company’s carbon footprint in additional to the traditional financials. Everyone at CITI has a coach (a CITI staff member) that helps define individual, quarterly goals that we track. These individual goals, team goals, business unit goals, and company goals get scored by our peers at the end of each quarter.

Your web site says CITI is employee-owned. How is that structured?
In an effort to ensure long-term success of CITI, the company established an employee stock ownership program. The impetus for this came from our staff who wanted to establish a participative, socially responsible, worker-ownership culture. So after one year of service, an employee becomes eligible for shares of company stock. The goal is to increase ESOP ownership and transfer up to 45 percent of the ownership to staff.

Seems like the nonprofit world is a finite market. Has CITI thought about how it can grow?
Ultimately, our growth is dependent upon our ability to leverage technology to make a significant impact for our clients. One way to grow is to serve more clients and play in a larger sandbox. This is possible, but the challenge becomes scaling our services so that we are providing consistently to a growing number of clients. Another way to grow is to provide more IT services to the clients we already have. This is also feasible, but then the challenge becomes offering technology services that are “just right” for the organization rather than being determined by an internal growth number. If we are successful in making a significant impact that dramatically accelerates the progress on our most urgent social issues, would our clients require more technology support or less?

Recently, several of us at CITI met with Paul King of Process Experts (and former CIO of the Bill & Melinda Gates Foundation). We knew there was a connection when we read his tagline, which reads “Integrating People, Process, & Technology,” which is a concept and the exact language we use at CITI in our own collateral material and conversations.

The conversation with Paul confirmed our notion that social mission organizations need an integrated, holistic, strategic approach to technology and that we should continue to offer our CITI as CIO approach to help organizations align their technology with their mission, make their existing operations more stable, and potentially reduce costs in the process.

At one point in the meeting, Paul said, “The biggest problem is that the people who know the technology are often brought in too late, rather than in the strategic planning phase.”

An organization’s leadership needs to be engaged in conversations and planning around technology.  A trusted technology adviser can help nonprofit leaders better understand how technology can solve their individual and organizational problems.

Another theme that came up in the conversation is the need for more information sharing and fewer silos both within an individual organization and between nonprofits. One real value-add that a CITI CIO could deliver is the cross-pollination and exchange of ideas, information, and best practices across nonprofits.  CITI serves as a community builder and connector, helping multiple organizations develop innovative solutions to common needs.

An article in the November 2009 issue of the Harvard Business Review on Galvanizing Philanthropy speaks to the challenges philanthropic investors face when choosing between initiatives. In the article, the authors recommend a process of getting clear, getting real, and getting better to maximize impact, and they highlight some of the strategic decisions these investors face. Information technology wasn’t explicitly mentioned in the article (though data played a significant role), but IT can frequently be a catalyst and tool to demonstrably increase organizational effectiveness – and thus investments.

Paul King is a CIO who has been having this discussion with investors and we look forward to joining him!

Last week, CITI attended the Green Business Summit and awards event at the Omni Shoreham Hotel hosted by the Washington Business Journal. Thanks to the efforts of Brian McIntee, our CFO, and Katherine Mowers, Senior Project Manager, CITI was a 2009 finalist for an award in the Innovation category for implementing green IT practices and significantly reducing energy consumption at our office. George Washington University took home the award for innovation, but they clearly deserved it for their efforts in reducing the amount of waste left behind by students at the end of each term, so it made the disappointment of not receiving the award a little bit easier to take.

At the green business summit, there were panels of experts addressing a wide range of sustainability efforts, from HR best practices like telecommuting and recycling, to videoconferencing and remote monitoring, to less painful financial audits. While these may sound like a bunch of unrelated topics, the underlying narrative for most of their discussions involved sharing their customers’ interest in making the world a better place or attracting the best talent by being the kind of business that values sustainability just as much as everything else.

Among the panelist were John Friedman, representing the Sustainable Business Network of Washington (SBNOW), and Scott Pomeroy of the Downtown DC Business Improvement District, who gave SBNOW and CITI a shout-out for the green business certification process where we earned the highest Green Pillar level certification.

Susan Cunningham, Director of Sustainability Consulting and LEED AP at Gensler, presented a compelling argument for a green development framework for any businesses that focuses on:

• Operating Savings
• Stewardship of resource (or asset value)
• Brand
• Productivity

Susan, as well others, talked about people-driven businesses, knowing the full extent of the expertise you have in the room, and establishing a good measurement practice as keys to a successful green development framework.

Tom Russo, Chief Technology Officer at Akridge, talked about how he practiced his “green pitch” on his elementary school kids under the assumption that if his kids could understand the value of taking something old and combining it with something new, than the average CEO shouldn’t have too much trouble embracing the concept of sustainability within their organization.

With all of the different ways that folks are becoming greener, from the zero waste movement, to climate legislation battling through a maze of opposition, to new green EPEAT rankings for IT equipment, where does a green IT solution fit it? Give us a call. We’d be happy to talk with you about it!

Dave Deal and I recently returned from the Groundwork Group 2009 Nonprofit IT Conference: Sustainability through Technology. The theme that nonprofits need to think strategically about technology and have a CIO role came up in several ways. There was one panel discussion in particular, presented by Groundwork Group, that addressed how IT has helped small, medium, and large nonprofits build capacity or become more efficient.  Some of the take-aways from this panel discussion include:

• Technology can really make a difference
• Nonprofits have very limited time, resources, and money, so it is imperative to streamline operations and use technology to deliver services as efficiently as possible
• Capacity planning requires technology planning
• Get technology experts on your Board
• Get an IT plan
• Create an IT Task Force Committee focused around projects
• Do a better job of sourcing computer hardware
• Pay more attention to the security of sensitive information
• Financial audit costs can increase if there is a lack of standardization
• Document everything
• The farther behind you get the more it’s going to cost

It’s also worth mentioning that the morning keynote given by Mike Brevard, Enterprise Solutions Director, Microsoft Heartland District was about how organizations can reduce IT costs by refining the organizations business processes.

A recent article from CIO Insight, “Increasing IT Capability While Cutting Costs,” described research findings from Jeanne G. Harris, Allan E. Alter and Michael K. Nieves. According to the authors:

“Reducing IT costs while improving IT capabilities may appear to be a paradox. But by focusing on fixed IT costs and following a strategy of sustained cost reduction, organizations can invest in new capabilities and innovation and prepare for future growth, even as they tighten their belts.”

Funny thing is, nonprofits have been doing more with less for years! Guess we should be glad that the rest of the IT world is finally having the same conversation we’ve been having with our clients for over 16 years.