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Making the Build-or-Buy Decision: A Thorough Analysis Before You Decide By Audrey De Jesus, Wellington Consulting Inc. Wellington Consulting recently attended a technical conference for non-profits, where business and IT personnel represented foundations and fundraising organizations that ranged in size from large hospitals to small settlement houses. When the discussion turned to database applications, most organizations had one critical thing in common: unhappy users. Organizations using off-the-shelf or custom-built solutions were struggling with such issues as lack of functionality, lack of user friendliness and expensive support agreements. Issues with Your Core Application You may find yourself in a situation where you have to spend a lot of money to upgrade an existing application or purchase a new one in order to meet your needs. An application can become obsolete due to any of the following scenarios:
Strategic Analysis "The first thing is to perform a Strategic Analysis (SA) to figure out what people are unhappy with," explains Dean Wellington, President and Founder of Wellington Consulting. "You must examine your business requirements to identify what you really need." Once you verify that you have a list of functional needs that your existing system is not satisfying, you have four choices:
An SA is a project in which a firm gathers systems information and business requirements from development officers and administrators, data and gift processors, technical support staff, high-level directors and actual users. Depending on the size of the organization and the level of detail required, the time span for an analysis can be anywhere from two days to two weeks. When performing this type of general analysis the firm performs an assessment, which includes the following tasks:
"You want to justify why you are doing something," said Wellington. "The first question is do you need an application and if so, why? Is there something you want to do that you have not done before? Or do you have an application and want to get rid of it for some reason? I always double-check why an organization is getting rid of a system – often the reasoning enables the organization to clarify their original decision." Making a Change Doing nothing, while an option, is not a reasonable one if your existing system is failing you. Even if your organization lacks the budget for IT and fundraising development activities, you must find a way to address an old system that lacks functionality. Otherwise you end up doing a lot of work manually that could be automated and this results in wasted time and money. Enhancing an Existing System In some cases an organization may consider adding functionality to its current application through customizations. Yvonne Stefanin is the Director of Information Management at the Hospital for Sick Children Foundation, an organization dedicated to the improvement of children's health, located in Toronto, Canada. Stefanin decided to outsource an SA to help prioritize the components of an application development project. In the course of this one-week analysis, Wellington Consulting examined the foundation's environment and determined high-level business and reporting requirements. Lisa Bergman, Director of Consulting Services at Wellington, directed the analysis and saw the project through from start to finish. This SA was done remotely through phone conferences, e-mail and fax, in order to save time and money. At the outset, Bergman called Stefanin for a business requirements meeting. "In addition to understanding the real priorities, we discussed the reporting system she had in place, including report names, descriptions, parameters and samples," said Bergman. After detailed clarification of the business requirements, Bergman met with her senior project manager, Rachel Pearlman, and provided her with a thorough report on the agency's needs. Pearlman then worked with Wellington Consulting's database administrators and developers to discuss database and design requirements, while communicating throughout with both Bergman and Stefanin. The ongoing communication was necessary to keep business requirements updated as well as to review timeframes, documentation transfers and budget status. The analysis ended with a proposal, recommendations and demo for the new reporting enhancements. As Stefanin said, "The analysis helped us iron out our immediate needs." Replacing Your Old System with an Off-the-Shelf Many organizations consider this option when presented with the challenge of enhancing their system. But how does an agency determine what the most effective application would be? It is essential to have a clear understanding of an existing system's functionality, as any function of that system may be forfeited when converting to a new system. "And the question then is: Are you trading up as opposed to trading down?" said Wellington. For example, the new system you're considering may include a reporting engine that your old system doesn't have. While you're gaining functionality what are the costs in training and support for this type of engine? Or you may have a function in your current system that was developed to work around a bug in an old system and its value you no longer need. A Gap Analysis addresses these issues. Gap Analysis A Gap Analysis identifies the discrepancy between what is and what should be in your system. If a discrepancy exists, a strategy is developed to close the gap. After identifying the agency's business rules and the logic underlying them, it is essential to assess the functionality of each rule and determine if it is still relevant to the business. Performing the analysis before implementing a new system greatly reduces the risk of putting something into production that does not meet the needs of the organization. Working with Limited Resources Applications vary in size and functionality. There are a few fundraising applications that can support a database of two million donors, while others can accommodate no more than 100,000. Various off-the-shelf solutions are available for smaller organizations with limited assets. A small organization with potential for growth must often pose the question: "Do we buy the smaller system, knowing that we will eventually need to upgrade, or do we buy a larger system that will support our donor database in the future?" Problems can arise when an organization buys an off-the-shelf solution that is too expensive to support, whether it involves upgrades, training or just getting standard reports written. Some vendors will no longer support an old version of software once the newest version becomes available. In this case, the organization has to depend on in-house IT personnel or consultants to handle any problems with the system. Of course there is the option of upgrading to the new version of the application, but this may mean purchasing new hardware and paying thousands of dollars to the vendor for training system users. Reporting engines in the larger systems can also require high-level developers to run the queries and create reports. If an agency doesn't have that type of personnel in-house, it may mean paying the vendor each time a report is generated. Paul Racioppi is the Director of Development at Greenwich House. Located at 27 Barrow Street, the agency has served as a center of community life in New York City for a hundred years. In a recent conversation with Wellington Consulting, Racioppi discussed his fundraising software. "Our current application is like loose fitting clothing. It's too big for us. We should have done a Gap Analysis before making a decision. Before we decide to upgrade or build any future applications we will definitely do an analysis beforehand." Performing the Analysis A successful analysis identifies, interprets and assesses all business rules and logic. To fill in the gaps, there are normally three sets of requirements: managerial, functional and technical. Tom Lowe, Director of Circulation, Promotion and Development for Ave Maria Communications (AMC) decided to perform a Gap Analysis before selecting a fundraising application for his organization. AMC, a member of the Catholic Press Association, publishes Credo, a weekly nonprofit newspaper, and owns Ave Maria Radio (WDEO in Detroit and WMAX in Saginaw). Lowe included criteria from both the business personnel and the IT staff at Credo in order to make the most informed decision possible. When he narrowed the search down to two applications, he used a graph to rate each with a ranking score of three to six. The following are some of the criteria he used to make a decision:
Building a System In-House One organization that Wellington Consulting spoke with at the conference had built a custom application for fundraising. The application, developed by its IT department, looked like the perfect solution for the organization's new fundraising initiative. However, because the users and administrative personnel did not participate in the implementation, the application was difficult to use. When the person that designed the application left the organization, no one on staff was able to run queries or get reports. "Its critical to consider ongoing support and maintenance and what it really takes to operate the system going forward. Often, when you build a homegrown system, you forget that you have to keep a programmer on staff maintaining it and training the users," said Wellington. Outsourcing an Analysis Making the build-or-buy decision is a difficult choice for most organizations. To complicate the issue, the personnel involved in the decision often do not have the required experience, track record or insight into the development of business applications. "Many organizations make the mistake of having a programmer or program manager do that kind of analysis," said Wellington. "Programmers generally don't have the experience of many projects in many environments over the course of many years to be able to establish realistic estimates." Important issues may get lost in this case, especially in terms of the cost of training, QA, implementation and data migration. When an organization engages a firm to address the build-or-buy decision, people with specialized skills handle these issues. The head project manager directs the analysis and a senior project manager reviews documentation and investigates revenue stream functionality of the current system. DBA's assess the database and write a detailed report for the client. One or more developers may be involved to prepare the database and the model for the project. "A good firm that performs Strategic Analysis does this soup to nuts thing all the time," said Wellington. "They have documents, boilerplates and systems that encompass all the pieces so nothing is lost or forgotten." While outside people may not be experts on your organization, they do bring the accumulated wisdom of working in hundreds of different environments. They've seen what works and they know what doesn't. When you bring in people with this kind of knowledge to help you with decisions about your core application, you are much more likely to end up with the most functional and cost effective solution. Moreover, you have the advantage of working with happy users. As we all know, when the users are happy, everyone is happy! You may contact Audrey De Jesus by e-mail at audreyd@wellcon.com or by phone at (201) 944-9004 ext. 262.
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Planning & Management.... An Agency Profile: Transitional Services for New York, Inc. (August, 2003) Software for Nonprofit Accounting (March, 2003) How to Accurately Plan Your Agency's IT Budget: A Workshop Synopsis (October, 2002) Would You Like To Improve Agency Communications? Develop an Intranet! (October, 2002) "Something from Nothing" - How Housing Works built a state-of-the-art IT infrastructure on a shoestring budget. (August, 2002) Making the Build-or-Buy Decision: A Thorough Analysis Before You Decide (February, 2002) Online Facilitation (December, 2001) The ABCs of ASPs (November, 2001) The Pros and Cons of ASPs (November, 2001) Using an Application Service Provider To Transform Your Agency (November, 2001) The Nonprofit Web Site: Tips for Attracting and Retaining Visitors (April, 2001) A Case Management System Case Study: Providence House (January, 2001) Covering Web Site Costs and Online Fund Development (January, 2001) I&R Best Practices: Profiles of Three NYC I&R Services (November, 2000) One To One Marketing for Nonprofits (May, 2000) Planning for Success: A Practical Approach to Technology (March, 2000) Networking for the Small Nonprofit: The Asian American Federation of New York (December, 1999) Developing a Technology Plan: Key to Getting Needed Funds (October, 1999) Should Your Organization be an E-Commerce Provider? (October, 1999) Stretch Your Technology Budget - Take Advantage of Product Donations (June, 1999) Contact Tracking That Works (April, 1999) How We're Using Information Technology to Further Our Mission (February, 1999) PeopleKnowledge: One Solution to Data Management (December, 1998) Softward Licensing: Protecting Your Organization From Lawsuits (October, 1998) Other Articles of Interest.... GuideStar: Getting Form 990 Online (October, 2001) Nonprofits Benefit from ePayments Technology (April, 2001) Paving the Way to the Future: DYCD's Comprehensive Contract Management System (January, 2001) Creating the Paperless Office (November, 2000) Globix Technology Grants Help Nonprofits Realize Operating Efficiencies (November, 2000) TECH-U-NET: Providing Technology Guidance to Nonprofits (November, 2000) Technology Technical Assistance: Why Use it, How to Manage it (May, 2000) New Web Site Facilitates Quality Program and Evaluation Planning (March, 2000) Lessons From the Life of a Learning and Access Center (December, 1999) Distance Learning and Training can be Low-Key, Low-Tech, and Low-Budget (October, 1999) If Your Computer is Looking a Little Green Around the Ears, it Might be a Virus (June, 1999) Program Donates Technology to Nonprofits (April, 1999) New York Today Offers Free Web Services for Nonprofits (February, 1999) Register Your Internet Domain Name Now (February, 1999) Diffusion Fund Enables Advanced Telecommunications for Disadvantaged. . .(December, 1998) BrookynX - A Guide to Getting Your Communities on the Net (October, 1998) Learning the FAQs: Free Education and Training for Nonprofits (October, 1998) |
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