The National Disability Insurance Scheme (NDIS) scheme is here and it is rolling out in pilots across early adopter community services organisations selected by the Commonwealth.
The NDIS introduces client-based revenue rather than the previous block funding where service providers received regular and known grant allocations.
The introduction of change for anyone can create anxiety. This no doubt is going on for many NFP organisations who may be uncomfortable working on a commercial basis and measuring performance, especially at an individual level. Many will not know quite where to start.
When a client can choose whom they want to provide a service, quality of service becomes an important driver to retain clients and generate sufficient funds to survive in a more competitive market. This can cause organisations to literally go out of business.
The outcome for many organisations might be consolidated under another organisation or they find it all too difficult and raise the white flag.
There is little doubt that organisations that start putting in performance systems now will get an early mover advantage and be seen as a provider of first choice. They have made the decision of business sustainability. It means that they understand the impact of fundamental performance KPIs.
It is important to understand the financial impact of your activities. Can you ensure that you are not over-delivering on your services for instance? Many NFPs either do not know if they are over-delivering on a particular program or find out long after the fact when it is too late. The organisation’s funds spent on over-delivering are non-recoverable and will have to be taken from reserves.
Even if an organisation ensures financial control at the organisational level, it may be masking inefficiencies and lack of quality at an individual program and client level.
There are many organisational initiatives that have to be put in place to effectively measure performance. First we have to ensure that the right data is captured, accurately and in a timely manner. At this point it is important to understand the data and systems required.
The issue for many organisations is that data needed for these KPI measurements is typically stored in more than one system. All organisations have multiple systems and in the case of not for profit organisations this would be at least a payroll/HR system, a client/patient/case/program management system, a donor/supporter system, a finance system and budgeting information. They have employee, timesheet, budget, rosters, client, service, programme, income, expenses and budget information stored in separate silos. For many community and disability service providers the introduction of more comprehensive billing and collection systems will also be necessary in this new NDIS world.
To clearly understand performance then, the first step is to understand and design your data model. What data do we need and where is it located? If it occurs in multiple places, which is the truest source? This data needs to be combined and ‘staged’. This is why not for profit organisations need to start investing in business intelligence rather than just silo and department-based systems. You need something to sit across all your systems.
This issue is not at all limited to not for profit organisations. Most businesses are struggling with disparate information systems. The opportunity is there for any business.
I am currently working with an not for profit organisations organisation now that is developing systems that enable it to measure $/hr revenue and $/hr cost. This will enable them to understand which service, which employee and which location is creating the most sustainable services for the organisation. Soon they will be in a strong position to provide their services far more effectively and decisively.
Can you say the same for your organisation?
Professional Advantage has worked with a number of not for profit organisations to gain efficiency and transparency into their data. You can read about our work here or read how Mental Illness Fellowship Victoria improved their reporting and visibility.
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