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Best Practices in IT Planning for Executives of Social Service Nonprofit Agencies
A Guide for Social Service Directors to Effectively Plan and Implement an IT Strategy
As the executive or CEO of an agency that serves people with disabilities, your focus is on your mission to promote social independence, quality of life, and maximum potential for all people with special needs.
To run an effective supported or sheltered employment facility or day services program you need to have employees, technology, contracts and funding, facilities, and time. These are the tools of your trade. And it is these tools that receive your full attention when it comes to either elimination or an agency improvement that will allow your organization to survive.
You make plans to increase fundraising initiatives, or cut staff, or replace your computers. These activities are part of the tactical strategies necessary, to an extent, to run your agency but they are what could be holding you back. These actions, without proper planning, could threaten your viability.
It is important for you to create strategic, long-term plans now to prepare yourself and your organization for the changes that lie ahead.
The current environment for social service agencies that serve those with disabilities is dark and seemingly getting darker.
- States and the federal government are facing a severe budget crisis
- Regulators continue to mandate changes that impact the workforce
- There exists a limited pool of trained professionals
- There exists uncertainty in funding for individuals with developmental disabilities
- Increased governmental focus on compliance is resulting in more rigorous audits and accountability
- The move from attendance-based to monthly authorizations for each service is dramatically increasing documentation and administrative time
- Wages and fringe benefits cost continues to rise
Is This the New Normal?
The only constant is change. New regulations are forcing changes in certification, processes, and reporting. Every day, you hear about pending rate changes and changes to funding. It is vital to attract and retain staff and you need to provide them with the tools that make them more effective. And, with all these moving targets, you are required to be in compliance and handle these increasingly rigorous audits. Unless you are planning to close your doors, you’ll have to accomplish all this with higher costs, greater demand for services, and tighter budgets.
A Strategic Plan for Technology
The standard approach has always been to cut budgets when faced with this type of adversity. But can you cut your way to survival, much less prosperity?
According to Jeffrey Forman, CPA of Forman & Associates Consulting, “The bottom line is you need to reposition yourself now. You need to do some things immediately and then, more strategically, figure out where you are going to be in a year or even year and a half.”
Of all the issues facing your organization in today’s environment, your information technology strategy will have the greatest impact. But the executive’s approach to technology planning is usually more tactical in nature and application. There needs to be a different way of thinking about and talking about information technology and IT projects for your organization.
Consider that there are two approaches needed to make information technology help your agency achieve its mission:
- Think and plan strategically to help everyone understand that the proper investment in the right IT solution is critical
- Provide an executive-level sponsorship of all IT initiatives
Executive leadership is critical to creating change. When people begin to understand the expectation for a significant return on the IT investment, they may decide it’s easier to do nothing rather than committing to the improvement. A grant or gift may be sought in order to avoid making changes that would allow internal funding.
IT projects are a waste of time if they aren’t going to deliver real business value. But failing to execute an IT project that can create business value is a missed opportunity.
A good IT plan will do more than acknowledge that technology implementation will help treat the symptoms but will support the business goals and strategies contained in the agency’s plan and mission statement. And a good IT plan not only improves the likelihood of approval, it also helps assure that the project is successful.
According to a study by the Standish Group, a Boston-based research group, in 2009*:
- Only 32% of IT investments are successful
- 44% of IT projects that were implemented turned out to be “challenged” (late, over budget, and/or with less than required features and functions)
- 24% of all IT implementations were canceled
These results are alarming. The truth is that the majority of business-related IT projects are failures.
Further, of all these IT investments that Standish reviewed, they found:
- The IT expenditures turned out 214% over budget, on average
- Despite going over budget, were not completed on time (over schedule by 202%)
- Only delivered 74% of the expected benefits
This is not to discourage any IT project investment but to demonstrate that they can go wrong if not properly planned out and supported by agency management.
The 10 Reasons for IT Investment Failures
These reasons for failure are divided into two categories: those related to the business and those related to the IT project itself.
The project issues are a result of:
- Lack of input from the technology users
- Technology incompetence
- Lack of resources
- Unrealistic time frames
- New technology
But the more common, and more critical, issues are a result of the business:
- Lack of executive support
- Unclear objectives
- Unrealistic expectations
- Incomplete requirements
- Changing requirements
As you can see, most of the issues arise from the strategic planning from management or the executive director.
Lack of support does not mean the executive wants failure but is the one who hands the project off to an IT department or individual. It may be deemed “too technical” and not in the realm of the chief executive. Because the project is handed off to the IT staff, only the technical aspects will be the objectives in the project and not the strategic business goals. Without clear and correct objectives, there can be over-inflated expectations which could lead to a lack of the right features or an outright failure. And if all the features, benefits and requirements are not planned out then they could end up missing in the final project or the project is constantly being reworked once new requirements are inserted at the last minute.
So, you can see where the executive is the one who must have control over the IT investment from the beginning of the planning stage all the way through to implementation. And the plans must answer not only the traditional concerns but also assure alignment with the “big picture” goals of the agency.
When you are focused on achieving strategic goals, you will want to know how all investments will help you achieve the mission and goals of the organization. You will think of IT as a tool available to your team increase performance; not as something you do not understand that should be delegated to someone that understands computers.
The Benefits of Applying Your Strategic Vision
The benefits from realizing the agency’s strategic vision should be accepted as justification for the information systems that enable them.
However, if you’re considering an upgrade or installation of a new IT project then you need to reconsider your approach. Many times, the agency staff will present problems to the executive that would be solved with new software and hardware products. The executive will, in turn, present the request to their board for approval. And the request is summarily denied.
See if this scenario sounds familiar:
Your staff is spending one hour per day collecting, transporting and filing paper-based documentation. They would like document the services electronically and store them in a database which will eliminate the time and cost.
They will need computers and Internet access to document these services. They will need web-based software, laptops and broadband Internet service. Cost is 2x savings. The impact, in tactical terms, will be “Fewer hours spent handling paper documents.” The justification is to spend now and save later – “After year two, savings is x.” This is presented to the board and the answer is, “No, we don’t have any money.”
Sound familiar? The problem with this approach:
- The proposal is stated in terms of symptoms: product features, staff needs, requirements to do their jobs
- There is an obscure connection of symptoms to the real business drivers
- The impact is minimal compared to opportunity
- The justification is usually that it will, “make it easier on staff, eliminate paper, and save some time.”
Most of these proposals seek approval for a system that fulfills a functional specification – but not a specific business result.
There is no clear link to the “big picture.”
You are forced to live with the same problems, accept that “there is no money”, and that you will try again next year.
Contrast this approach with the following:
Rather than risk going down the same old path, we recommend focusing on the ensuring alignment with current business priorities, then further aligning the project with your critical business metrics.
With this critical alignment in place their will be a clear understanding of how this project can support higher order initiatives; it will bring crystal clarity to scope and project priorities and will cement executive support for the initiative through to completion.
This could be your presentation to your board:
Executive Summary - Approval is Requested for Intuition by Vertex:
The agency’s mission is to provide comprehensive training and support services that empower people with disabilities or disadvantages to live and work as valued members of our communities. To achieve this end, our agency develops supports and services to respond to the needs of the people we serve. This includes:
- Assuring that every client receives the maximum quantity and quality of services;
- Delivering supports and services closer to the homes and communities of our customers.
Our Information Technology Planning process has identified ways to increase the quantity and improve the quality of services we provide to the people we serve. By doing so we will achieve:
- Increased revenue of $48K per month due to increased utilization of authorized services;
- Increased delivery of authorized services without additional labor cost due to 33% reduction in non-billable activities;
- Better and more positive outcomes by including the client in the documentation process;
- Increased revenue per labor hour by 8%
- Improved cash flow by increasing the frequency of claims billing.
We can do this by eliminating the paper-based documentation and billing systems and replacing them with the Intuition by Vertex electronic case records and documentation software from Vertex Systems. This investment will yield $576K in additional revenue per year.
We recommend using a 24-month lease to handle the cash flow impact. No payments are due for six months. Increasing quarterly payments are scheduled to coincide with the increased cash flow.
You can see the difference in the approach to how you create your plan and present it to your funding source. Your goal will now be to use technology to drive quality, decisions, and communication. You will plan out how technology will increase effectiveness, lower overhead cost, increase quality of service, and make sure you meet the needs of your clients. You will demonstrate how technology will maximize service revenue.
For all agencies that serve those with disabilities, we have recommendations to make sure you are able to make technology work to enhance your capabilities as well as help you grow and thrive in a touch economic market.
- Your Technology Plan must clearly support the agency’s mission
- Technology must enable the agency’s strategy
- The IT project scope must extend beyond the symptoms
- The IT Project team should include external resources – an outside consulting entity to bring in new ideas and processes
- Perform a project risk evaluation – determining if you’ll be exposed to any financial or service loss due to an inexperienced vendor or inferior products
- Conduct a technical readiness assessment
The environment isn’t changing in your favor. This won’t fix itself next year. The easy answers have already been used. As previously stated, your agency must reposition itself to take advantage of new opportunities and continue to do so in the strategic planning process.
You know that information systems are a key part of your survival. Unless you are a new executive in a “honeymoon” period, you will have to convince those who have not been convinced in the past. Position your IT project together with the agency’s mission and strategies – they are one and the same. And get help from the outside to lower risk and improve the quality of your proposal.
*The respondents to the Standish Group survey were IT executive managers. The sample includes large, medium, and small companies across major industry segments : banking, securities, manufacturing, retail, wholesale, heath care, insurance, services, and local, state, and federal organizations. The total sample size was 365 respondents representing 8,380 applications. In addition, The Standish Group conducted focus groups and personal interviews to provide qualitative context for the survey results.
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