In the realm of nonprofits, the choice of an Information System (IS) is pivotal. It can significantly impact your organisation’s efficiency, service quality, and overall effectiveness. While the process of transitioning to new information systems may seem daunting, it’s essential to get it right. Many nonprofits invest over a year in selecting and fully implementing a new IS, and the precise timeline depends on the organisation’s size and the number and complexity of its programs and services. This guide will walk you through a four-step process to ensure that you make the right choice.
Step 1: Establish Project Assumptions and Selection Committee
Before diving into the sea of information system options, it’s crucial to build consensus among stakeholders regarding why your nonprofit is seeking a new system. Clearly define your goals, what you aim to achieve, and how the new system aligns with your organisational strategy.
- Project Assumptions: Determine key project assumptions such as the deadline for completion, budget source, staff time allocation, and the selection of stakeholders, committee members and the internal project team.
- Selection Committee: Form a selection committee that represents various facets of your organisation, including program management, operations, executive leadership, and frontline positions. These diverse perspectives are invaluable in identifying system strengths, weaknesses, and improvement ideas.
- Involving Leadership: While the selection committee will make recommendations, involve leadership at different levels throughout the process. Keep the board informed, as they will ultimately approve the project.
- Dedicated Project Manager: Designate a project manager within your organisation to oversee the selection and implementation process. Having one person dedicated to the project ensures smoother operations.
Step 2: Define Requirements
Collaborate with stakeholders to gather and prioritise your organisation’s requirements. This step helps identify critical needs and avoids getting sidetracked by product features.
- Must-Have Requirements: Clearly distinguish between must-have requirements and those that are desirable but not deal-breakers. Prioritise features based on their importance to your organisation’s mission.
- Understand Current Workflows: To meet your requirements, you must understand your organisation’s current workflows (the “as is” state) and how tasks are currently executed. Gather input from staff members who will use the system, as they can provide valuable insights into what they need from the new system.
- Data Migration: If you currently have data in an existing system, inquire about the process of migrating it to the new system. Also, consider data migration out of the system in case you switch to a different one in the future. Ensure that the new system can integrate with other software your organisation uses if required.
Step 3: Explore Options
With a clear understanding of your budget and requirements, create a list of potential systems and providers to evaluate against your needs. This step involves creating a shortlist of options, developing request for proposal (RFP) documents, and scheduling system demonstrations.
- Short-List of Options: Begin with research and preliminary investigations of platforms and vendors that align with your requirements. Use a set of must-have criteria to narrow down your choices to no more than four or five options. To help you identify vendors, ask other nonprofits for referrals, use online research (Google), look for vendor directories, attend industry events and conferences or engage an independent nonprofit consultant.
- Request for Proposal (RFP): For complex information system selections, organisations often create RFP documents based on their requirements and send them to shortlisted vendors. An RFP is a formal document that invites vendors to propose solutions to address your organisation’s challenges or requirements. It can contain sections on: project overview, scope of work, vendor qualifications, evaluation criteria, timelines, terms and conditions etc, and often breaks down requirements into functional and non-functional:
- Functional Requirements: Functional requirements specify what a system or software should do in terms of specific features and actions.
- Non-Functional Requirements: Non-functional requirements define the qualities or attributes a system should have, such as performance, security, and usability.
- Scheduling Demonstrations: Request system demonstrations from selected vendors to evaluate their capabilities. Demos provide valuable insights and help you assess a vendor’s intangible qualities.
Step 4: Make Your Selection
After completing demonstrations and receiving proposals, it’s time to compare and evaluate your options. Develop a weighted scoring system to assess vendors based on identified criteria.
- Criteria for Evaluation: Establish criteria such as system demonstration, implementation methodology, support and training, costs, ongoing costs, and client references. Weight these criteria to obtain a total score for each vendor.
- Upfront and Ongoing Costs: Understand the full range of upfront costs, including implementation, customisation, setup, ongoing license fees, staff time, training, support, and data migration (if needed). Consider the ongoing costs of using the system.
- Vendor References: Prior to signing any contract, thoroughly check the references of potential vendors. This step is essential for gaining insights into their reliability and performance.
Other critical things to be aware of…
The Distinction Between Fundraising and Client & Case Service Delivery Systems
Nonprofits often have distinct needs for two different types of information systems: fundraising and client & case service delivery. It’s important to recognise that these systems serve different purposes and may require separate solutions. Fundraising systems are designed to manage donor relationships, donations, and campaigns, while client & case service delivery systems focus on delivering day-to-day services to clients, recording client data, and managing case files. Rarely do the stakeholders involved in fundraising and client & case service delivery overlap significantly.
Data Security and Compliance Considerations
When selecting an information system, prioritise data security and compliance with relevant regulations. Nonprofits often handle sensitive data, including personal information about clients and donors. Ensure that the system you choose has robust security features, encryption capabilities, and access controls to protect sensitive data. Additionally, consider compliance with data protection and privacy laws, depending on your operations.
Reporting and Analytics
Effective reporting and analytics capabilities are essential for nonprofits, especially when reporting to funding bodies, donors, and stakeholders. Evaluate the reporting and analytics features of the information system to ensure that it can generate the necessary reports and insights to demonstrate your organisation’s impact and effectiveness. Reporting tools should be user-friendly, allowing staff to extract and analyze data for reporting purposes.
Choosing the right Information System for your nonprofit is a critical decision that can significantly impact your organisation’s efficiency, service quality, and overall effectiveness. Following these steps will ensure that you make an informed choice that aligns with your organisational goals and mission.