Being a Not for Profit (NFP) is tough in Australia right now. Organisations are operating in a highly competitive environment, whilst simultaneously having to re-engineer their underlying business models. With the NDIS, the government’s changing approach to funding is squeezing providers and forcing them to review every dollar they spend on back-office operations.
Meanwhile, the public is better informed than ever and expecting only the highest quality services.
The only way forward is to build a digital transformation strategy that takes full advantage of your NFP status. Through BlueScale’s partnerships with a number of NFP organisations and NDIS providers, we are finding many organisations are missing out on basic IT savings. Below are 7 straightforward recommendations that your organisation should implement to better manage IT costs.
1. Take Full Advantage of Global NFP Tech Providers
Organisations like TechSoup or their local representative Connecting Up exist to provide NFPs with access to special rates on software, hardware, and services from major IT vendors. Many NFPs have yet to sign up to get access to donated or discount IT assets.
NFPs have told us that they have found the signup process difficult. It is true that it can take some time to complete the process. You may need to involve your executive and/or company secretary. However, this is a one-time investment that will continue to pay dividends for years. You need to do this!
There are limits on the number of donated and discounted products you can get within each quarter or fiscal year, you will need to work with your IT service provider to understand your IT fleet and identify where you will have gaps.
Having said that, even after you have used up your donated products, many major vendors provide NFP/charity pricing without limit. This can offer discounts of up to 90%, which can add up across your whole environment.
Microsoft, in particular, has a very strong NFP focus and are currently offering free Office365 licenses. As well as a $5k per year discount on their Azure Cloud Services.
Amazon Web Services (AWS) has just announced donating credits to NFP organisations. Towards web hosting, online storage, virtual server environments, and many other AWS services.
Dell also deserves a special mention. The size of the hardware discounts available for qualifying NFPs has the potential to redefine your business case when it comes to choosing on-premise vs cloud vs hybrid IT.
2. Always Ask For an NFP Discount
As well as offering a discount for NFPs on our own services, we regularly negotiate vendor discounts for our customers – as they say, if you don’t ask you don’t get! We find that vendors that don’t publicise NFP pricing will often discount if asked.
Recently we were working with US security training vendor Knowbe4 on behalf of one of our NFP customers. We found that they were willing to provide a discount despite having no local distributor. For them, it was a core part of the company’s vision to contribute to the global community.
You can often obtain further discounts if you are willing to allow the vendor to use your name in their marketing material. Beyond the obvious financial benefit, don’t dismiss the free promotion of your own brand and services.
BlueScale operates using a transparent procurement model. We share our wholesale price and use a fixed markup for all assets. Which means that any vendor discounts get passed directly on to our customers. Having said that, if your IT Service provider has a different procurement model push them to get you that NFP discount.
3. Deploy Hybrid Cloud Solutions
Given the hype, you might be forgiven for thinking that cloud services will make your breakfast, help you lose 10 kilos, and give you next week’s winning lottery numbers. Despite reality being contrary, cloud services still need to be subject to a sensible business case and compete against other approaches.
Currently, none of the major public cloud vendors are offering NFP discounts comparable with those already available for conventional hardware and software. Those breathless articles you read in the media are looking at the business case for fully commercial organisations. Your NFP will have quite different numbers. That being said, there are some real benefits from cloud-based services. Wouldn’t it be great if you get the benefit of both?
In fact, you can. A hybrid approach gives organisations the best of both worlds. This allows NFPs to retain control over IT costs by taking advantage of only of the cloud services that make sense for the organisation. All whilst preparing the organisation to easily transition to full cloud services when/if the financial story improves in the future.
4. Avoid the False Economy of End-of-life Products
Sometimes “free” can be very expensive. Not every donated or discounted product is right for your organisation.
Remember you are going to enjoy the Total Cost of Ownership (TCO) for anything you put into your environment. The purchase price is just one part of IT costs, and not always the largest part.
End-of-life products introduce security issues, can become too hard to support, and lead to an unstable and unproductive environment for your staff.
Be prudent in your use of free IT assets.
5. Use BPO to Reduce or Redeploy Your Headcount
Many NFPs have line-of-business applications (e.g. CRM, roster management, clocking systems) being supported by relatively expensive in-house resources. Usually whose skills are urgently required elsewhere in the organisation. For example, we have seen business analysts with SQL server skills, performing basic service desk work – adding and removing users, password resets, etc…
Business Process Outsourcing (BPO) allows your staff to focus on higher-value tasks. Your IT team should already have access to your key applications to perform basic user provisioning. Which puts them in an excellent position to leverage their existing support tools and ticketing systems to take on a broader application support.
Outside of the IT cost reductions, we have found that our customers have experienced a significant improvement in the end-user service experience via our BPO service. It can be confusing for your staff to know which person or group to call to help them with different applications. Consolidating support for all your key applications improves the quality and responsiveness of support.
6. Demand Fixed Priced Projects
Changing demand for services from customers, changing government funding and reporting requirements, changes to underlying technology – it all adds up to a huge ongoing impact on every organisation. Especially Not for Profits. Successfully managing that change, in particular your IT projects, can be difficult and risky.
Always ask your IT provider for fixed-price fixed-scope proposals. Something we have adhered to since our inception. You want to redefine the conversation around the business outcomes your organisation wants to achieve. As opposed to the hours IT plan to spend on some arcane technical details that you don’t understand anyway. Most NFPs simply do not have the in-house IT expertise to project manage time & materials based IT work.
Fixed price proposals mean that the project’s risks sit where they should – with the IT team. After all they are supposed to be the experts and in the best position to manage and mitigate those project risks, right?
As a bonus, we have found that the discipline of clearly defining the scope helps our customers better understand the outcomes they are looking to achieve. In some cases, the scoping process can lead to the cancellation of a project before it has begun. The cheapest point to stop a bad project!
7. Run a Responsive IT Support Model
NFPs, particularly those in the NDIS space, are operating in a dynamic IT environment. The volume and type of IT services that your organisation needs will not stay static for a month, let alone 12.
Most organisations are dealing with a highly casualized workforce, and are adding and removing sites/offices on a regular basis as they manage rapid staff growth, mergers, acquisitions and consolidation.
Your IT support model needs to reflect and be responsive to these changes – what we refer to as a Utility IT Service. Not be locked in to static assumptions about your needs. If you remove headcount, or dispose of unnecessary PCs – is that reflected in next month’s report?