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Twenty years of integration

Twenty years of integration
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Twenty years of integration

Fundraising | John Tate | 24 Apr 2009

The web puts integration back on the agenda, says John Tate.

Twenty years ago I left my job as a finance director in the commercial sector and set up an IT business. 1989 was the start of perhaps the last recession. Early clients in my IT business included organisations in the charity sector.

Back then IT investment had the capacity to offer quick wins, based in the main on PC technology. Parts of the finance function were often still processing work manually. A quick return on investment could be made by installing a PC-based system to automate much of this work. A product like Lotus could be installed and in use in a few hours. Benefits could be immediate. Characteristics of quick-win projects were situations where individual users or single departments could adopt new technology without the need for widespread organisational change.

As individual or departmental systems were improved the 1990s saw the growth of ERP (Enterprise Resource Planning) systems. Led by SAP at the high end of the market, vendors promised a single product that would offer an ‘end to end’ business solution to allow all departments to work with a single transac-tion processing system. This led to a trouble-some period in IT adoption. Organisations struggled and usually failed to manage the change required to get departments to work together in a new way. Widespread ERP implementation failure followed. The char-ity sector was not immune and many larger projects to develop integrated systems failed to deliver the anticipated benefits

This issue of Charity Finance includes the 2009 IT survey. In light of the current finan-cial environment the results are worth careful review. The ratings give cause for concern. Overall, about 40 per cent of organisations state their IT systems are average to poor. With technology playing a critical role in most charities, the underperformance of IT must be an area to focus attention.

In 1989 it was PC technology that gave us a step-change in our use of IT. Step forward to 2009 and it is the internet and widespread use of broadband/mobile connectivity that offers the greatest reward. Examples of this are remote connectivity allowing people to work from home or mobile working. The next level of benefit will come mainly from different departments working together in new ways with this technology.

Looking at more of the survey results, effi-ciency of business processes gets the lowest rating in terms of IT performance with some 50 per cent rating their systems as average to poor. My recent experience of working with charities certainly supports these find-ings. All too often the different transaction processing systems are not integrated, for example fundraising/membership/events/finance. Information needs to be re-keyed several times. This delays the availability of up-to-date information, requires additional staff and cost to do this work and creates the potential for error each time the data is re-keyed. Vendors are again touting ‘end to end’ solutions such as CRM (Customer Relationship Management) applications.

In previous articles, I have commented on research work from the US that suggests there can be up to a threefold difference in finance/IT costs for similar organisations, depending on whether they have a well run or poor finance/IT function. So the cost sav-ings are significant if you can get IT right.

With the development of web technology, most information can be captured at source and automatically fed into the different trans-action processing systems. The internet also gives staff and external stakeholders access to information ‘anytime, anyplace, anywhere’.

Are there signs this time we can manage the change to make this happen? Looking again at the survey, CEOs are taking an increased interest in IT and 70 per cent of boards have at least one trustee with IT knowledge. Wide-scale change really does need support from the top so this is encouraging.

Over 80 per cent of IT consultants, when used, offer value for money. However out-sourcing mainstream IT functions still has issues with 35 per cent of charities rating the service as average to poor. In the end you still need to own IT – and the buck stops with you to make change happen.

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John Tate

John Tate is a qualified accountant and entrepreneur. He is a columnist for Charity Finance, a visiting lecturer at Cass Business School's Centre for Charity Effectiveness and Trustee of Eduserv. He also non executive chair of Civil Society Media.

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