Any organization can operate more efficiently. The problem isn’t a lack of tools and processes; the problem is usually much more complex. It often involves getting internal buy-in to throw out the old processes and systems and instead use something that might take time to learn but will lead to a more efficient organization that is ready to grow its mission.
As technology options continue to develop at a rapid pace, data management solutions are constantly changing, and that means many (yes, you are not the only one) organizations are feeling squeezed out of technology because they are overwhelmed by the need but paralyzed by the multitude of options. So how do you move forward to becoming operationally efficient? First, take a deep breath and admit that you must make a change. The good news is that with the right technology, and by following a plan, you can turn even the most disorganized environment into a model of efficiency.
Step One: Overcome Myths
Over the past several years, I have had the pleasure of speaking with nonprofit leaders around the country. A vast majority of leaders acknowledge that efficiency improvements could be made and they could make better use of their data. So why aren’t they? The reasons vary but include the following:
- Small organization
- Local footprint
- Limited resources
- Loyal constituents
- Community name recognition
The above reasons (or any reason for that matter) for not reviewing processes and technology platforms only perpetuate the problem and the resulting chaos. Actually, each reason is an argument in favor of greater efficiency to grow the mission; one of the most effective ways to do that, as illustrated in the following images, is to drive out chaos by leveraging integrated, cloud-based solutions.
Visualizing Chaos versus Operational Efficiency
EFFICIENCY IN THE CLOUD
Step Two: Understand the Modern Organization
There are many positives to operating a 21st century organization, but often those positives result in management issues. Today’s organization is mobile, distributed, and lean from a resource perspective. Couple that with the increased demand for services, decreasing government and foundation grants, and an increased focus on metrics and outcomes by the donors, and achieving efficiencies no longer becomes an option. Traditionally, nonprofits have paid a disproportionate amount of attention to fundraising; however, very few have looked at the resource consumption (volunteers and staff) that current methods take to make the organization run.
It’s now clear that an effective data management system is needed. One of the most difficult challenges to overcome is knowing how to pull together an organization’s processes and data into one place. Let’s take a look at some potential pitfalls.
- Local System = Headaches. An in-house system can be a nightmare to manage and can get costly and troublesome very quickly.
- Free Software = Multiple Systems. Free is good, but be careful with this one. Technological solutions that are offered as a “free” service could mean it only serves or manages one purpose, so you will need many different systems to manage every core process. Since many of the systems will not pass information between themselves easily, it just sets up a “trap” involving additional work and fees. Remember the old adage, “There is no such thing as free.”
- Speed ≠ Efficiency. Spreadsheets might be a quick way to record information, but once you are on your zillionth spreadsheet, you will hear the word “cumbersome” more frequently.
- Flexibility = Chaos. Processes are there for a reason. Most nonprofits will experience higher attrition than for-profit businesses. Systems that are “flexible” and allow data to be entered and manipulated freely will create chaos inside the organization, as each person that takes on that role will implement their own “best practices.”
The modern organization requires data and ideally knows how to use it. Reviewing your organization’s data needs before making system improvements will yield big benefits in the long term. Anything short of that and you or your board might be disappointed in the results. At a time when you should be up to the task of managing your data, you’ll end up with weak long-term data strategies, little consistency in the data, and no transparency or accountability. Just like anything else, if it’s worth doing, it’s worth doing right.
Finally, it’s no secret that a cloud-based data management platform is one of the best ways to improve operational efficiency. Impacts include the following:
- Overhead – keeping labor and upgrade costs down.
- Opportunity – the ability to tap into the system almost anywhere at any time means greater responsiveness.
- Scale – how quickly and seamlessly the organization can grow.
- Consistency – limiting disparate processes and surprises down the road.
- Analytics – better data in, better information out.
- Adapting – an integrated data management platform that can grow as your mission grows.
Step Three: Integrate 5 Action Items to Operational Efficiency
Am I really adding five steps within step three? Yes. In a quest for efficiency, these five action items should be at the heart of an established operational philosophy.
- Implement systems that are set up operationally versus functionally. This is critical, since it brings a big picture focus to the organization and reminds everyone that it’s all about the mission. The day-to-day processes should, whenever possible, integrate within a bigger, more useful technological platform.
- Incorporate best practices. Although the term “best practices” seems overused, it does not diminish its importance. It means that everyone operates from the perspective that improvement is ongoing. It is no longer acceptable to be complacent with a system just because it’s always been used. I see many organizations utilizing multiple data platforms that are effective individually but are not efficient from an organizational perspective. The trouble is that if there is no mandate to strive for excellence, it will be difficult to get buy-in for a more efficient technological platform.
- Drive transparency. This is huge in today’s world because of the tremendous competition for every donation and because of the pressure on many fronts to understand how those donation dollars are used. Transparency will drive better service to all your constituents.
- Remove silos. This is often where inefficiency begins. It’s not unusual for people to have expertise in given areas. If your organization is structured operationally, as described in the first action item, silos become smaller and smaller. Sharing knowledge and utilizing a cloud-based data platform will eliminate silos. That reduces risk for the organization and makes transitioning staff less complicated.
- Less is more. Always ask why you are collecting data and what it means to the organization, because every action has a reaction. Make sure that every action your organization pursues is purposeful.
Taking the time to put in place systems that encourage efficiency—particularly cloud-based technology—ensures that your organization can deliver on its promises, operate transparently, and grow its mission. And that benefits everyone.