Is the technology in your Not for Profit preventing additional revenue streams?
Organisations are under increasing economic pressure to diversify their income. Costs are going up, and current revenue is flat or perhaps decreasing.
So, when an organisation considers alternative products and services to supplement their income, their current technology can often make or break this decision.
I come across this issue often, and it usually shows itself in two ways:
- The organisation decides NOT to pursue a new product or service because they can’t support it through their current systems; or
- The organisation decides to release a new product or service (or apply for government funding for it) and realises later how hard it is to administrate.
Both scenarios come at a cost:
The first one is the opportunity cost of additional revenue.
The second scenario usually results in significant manual processes that may drive up employee costs unnecessarily.
So, what can a Not for Profit do to reduce the risk of this happening?
Ways to ensure technology doesn’t hurt your revenue streams
- Develop an IT strategy – The first strategic intention for technology should always be to support the organisation’s strategic goals and mission. Still, very few Not for Profits create an IT strategy to do this. As a result, there are too many surprises when your existing technology prohibits or fails to support the new revenue stream goals.
- Invest in technology that can scale with your needs – Too many organisations choose to invest in “cheap” options as a stop-gap measure. This might be okay to test a Minimum Viable Product (MVP) idea. However, beyond that, it can create technical debt that will not scale – requiring another investment sooner rather than later.
- Schedule regular technology training – Sometimes, NFP staff believe that something cannot be done in their existing technology, but in fact it can. Cloud-based applications are constantly evolving, but if your staff hasn’t done training on your systems since Go-Live, they’re probably unaware of many functions and capabilities. So, before you consider something new, ensure you understand your options in your existing tech.
- Pick technology partners that understand your industry – Too many times, Not for Profits pick technology partners that mostly work with commercial businesses or government. As a result, the lack of industry knowledge requires the NFP to not only educate the partner during the design phase, but often lead the configuration/customisation discussion too. This often results in poor designs and costly support/change costs later that could have been avoided to meet future revenue stream needs.
Final Thoughts
When you are considering new revenue streams, you can’t always avoid technology constraints i.e. sometimes you will have to buy something new.
However, if you first align an IT strategy with your strategic direction and consider my other advice, you will reduce surprises and the risk of this happening.
I regularly help Not for Profits with IT strategies. Let me know if you need some help.
P.S. If you found this article helpful, you might want to read these too:
- How an IT strategy can boost your Not for Profit’s impact
- Why your NFP’s strategic plan needs an IT strategy
Tammy Ven Dange is a former charity CEO, Association President, Not for Profit Board Member and IT Executive. Today, she helps NFPs with strategic IT decisions, especially around investments.