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.

Like a lot of organizations, CITI probably talks more about practicing what we preach than actually doing it. So it was a pleasure to take action on our online strategy.  I sat down with our Online Strategist, Glennette Clark, a few months back and was the client for a change.  I’m sure it will resonate with many of you web managers when I let you know our website isn’t as perfect as we’d want it.  When you work on websites it seems you always see the stuff you need to fix and never the stuff that works right.  And a website – even a small one – can be such a huge project there is a real tendency to want to load up the content and let it be, despite knowing an integrated website is the best way to deliver content.  That is, a website where the content is not an after-thought but fully integrated in a marketing strategy that includes social media, press, and community, where all the parts reinforce the whole.

As a consulting firm, CITI knows our clients need to know what we do and how to get in touch with us, and our website has reflected that and not much more.  But as we advocate for our clients to do better at integrating their online presence with their long term community, fundraising, and mission goals, it has become clear that CITI needs to do a better job at that, ourselves.

Glennette’s consulting sessions started out with some standard questions and a questionnaire.  She briefed us on her obsession with measurements – explaining that even if you know where you want to go, if you don’t know how you are doing along the way then you’re going to end up somewhere else.  For every goal we thought of, Glennette challenged us to come up with a metric.  For several items, she helped us see that the metric that we were looking for wasn’t a web metric at all, and that we would have to delve into our internal sales database instead.  It was one of those exercises where you feel so righteous after the workout that you wonder why you put it off for so long.

I admit, one reason I delayed starting this project was nerves about everything we weren’t doing – either because I didn’t quite know what we needed, or just hadn’t ever got around to it.  Glennette was reassuring that everyone starts somewhere – the thing is to just start.  She didn’t assume I knew anything about analytics but didn’t baby talk it either. I’d been looking at our web stats online from time to time but not in any organized way.  It was a revelation to start pulling our web statistics into a usable report format we could share internally.

One interesting fact is the number of you who come to the CITI site searching for “online strategies” – welcome!  So you know you should be more organized in this discipline too.  After our initial meeting with Glennette we went off on our own for a month and worked on next steps from the action plan we’d created – immediate, short term, and longer term tasks to help organize our efforts.  We decided to focus initially on creating the monthly metrics report, and updating our keywords and metatags in the interim.  Next steps: social media strategies and converting the knowledge from our stats into content and findability.

If you’d like to catch up with Glennette yourself, she’ll be presenting on Wednesday the 19th at a webinar from 1-2pm:  The 10 Second Rule: Optimizing Your Website for Donations

M&R Strategic Services and NTEN work together on the annual Nonprofit eBenchmarks Study (you’ll need to register to see it), which allows you to look at your key metrics against a number aggregated from other organizations. Everyone’s mileage is going to be different, of course, but knowing how everyone else is doing gives you something against which to evaluate your results. The numbers are broken down by sector, so you can compare against your direct competitors, and know if it’s time to up your efforts or ask for help.

I particularly like the chart on page 7, which gives statistics for both advocacy and fundraising on open rate, click-through rate, and page completion rate, with a final response rate (being the click-through rate times the page completion rate — page completion is a percentage of the number of people reaching that page, not of the original sample.) This is a good yardstick to see where you’re weakest. If your click-throughs are competitive, but your page completion is falling short, you should work on your landing pages first. If your open rates don’t seem to measure up, work on your subject lines. (Though, as they spend a lot of type explaining, open rates are an unreliable metric. They also vary across the year — which is another chart on another page.)

Email is still the killer app, according to the study, at least for fundraising and advocacy. Not that anyone is really disputing that, particularly for short-term results. The study does give some quick case-studies on using text messages to boost email response and social networking to boost list growth. I was tickled to read in the social media case study (about a National Wildlife Federation program) that they had “no budget for list building,” which was followed by a pile of outreach they did to boost their list, which must have taken a lot of hours of staff time. Not to pick on NWF — I know of plenty of organizations that don’t really account for staff time invested in various projects, be they online or off, like special events.

An interesting post yesterday from Beth Kanter about metrics and return on investment on blogs.  I’m interested in return on investment on online presence as a whole, and particularly on websites, which is something that we’re just starting to work on a model for.

In the post on Beth’s blog, there’s a quote (from Jason Falls quoting KD Paine, I think): “Katie hit the nail on the head near the end of her round table discussion when she said, “Ultimately, the key question to ask when measuring engagement is, ‘Are we getting what we want out of the conversation?’” And, as stubborn as it sounds Mr. CEO, you don’t get money out of a conversation.

This is true as far as it goes, but at the same time it doesn’t help guide the decision of where to invest. Non-profits certainly gain value out of conversation – for many organizations, changing minds or informing the public is part of their programmatic goals, which in the end will help pay the bills one way or another (demonstrated progress leading to donations or grants). But to be effective overall, organizations need to be able to decide where to put their money – is it making the website more useable, having staff spend time on Facebook, or sending them to school assemblies or Capitol Hill instead?

This is a huge challenge that many organizations face in managing technology, and that advocates for technology within organizations face in trying to get buy-in for their initiatives — it’s hard to compare oranges to oranges between investments in program, fundraising, communications and now online communications.  Of course online communications *is* all of the above.  But it has rarely been integrated to the necessary extent within organizations.  Online communications or often enough technology as a whole is its own department, budget, and social class, even, without the standing in planning and budgeting that it should have.  And so it’s left begging for scraps without some way of showing what initial investment is going to deliver.

So yes, I think you do need to assign some sort of monetary value to getting what you want out of a conversation, and measure how effectively you’re doing that.