Grant Management Systems By Gregor McCall
In this ebook, you will learn: The key factors to consider if your organisation is thinking of building a software solution The key factors to consider if your organisation is thinking of buying a software solution Buying or building a software solution, what is the right investment for your organisation?
TABLE OF CONTENTS Introduction... 4 Chapter 1: Building a Grants Management System... 5 1.1 When to Build... 6 1.2 Advantages of Building... 6 1.3 Key Considerations... 6 1.3.1 Development Time... 6 1.3.2 Training and Support... 7 1.3.3 Staying Current... 8 1.3.4 Competitive Functionality... 9 1.3.5 Reporting... 9 1.3.6 Other Risks... 9 Chapter 2: Buying a Grants Management System... 10 2.1 When to Buy... 11 2.2 Advantages of Buying... 11 2.3 Key Considerations... 11 2.3.1 Not All Solutions Are Alike... 11 2.3.2 Reporting... 12 2.3.3 Best Practices... 13 Chapter 3: Considering the ROI... 14 Chapter 4: Summary... 16 4.1 Build Option... 17 4.2 Buy Option... 17 4.3 Key Considerations Summary... 18 3
INTRODUCTION If you want something done right, you might as well do it yourself. Although this opinion is shared by many when it comes to business decisions, is this the attitude you should take when it comes to Grant Management Software? Leading ERP and CRM vendors have spent years developing and investing in their applications. With so much concentrated development available to you from the experts, you should think carefully before deciding to build your own Grant Management application. As an expert in Grant Management solutions, with over 18 years experience in the industry, I am a supporter of the opposing argument that it is faster, easier, less costly and less risky to buy a solution, add components and fine-tune it to meet your needs, rather than design and build the application yourself. This paper outlines the advantages and disadvantages of both the Build and the Buy approach, offering key considerations for your organisation to factor in to the decision process. I will conclude this paper with the view that it is possible to attain the best of both options: Buy a tailorable industry-targeted solution, built on industry best practices, from an outside firm. The integration of best practices within software development is not about re-inventing the wheel, but rather about implementing that which has been proven to work. This ebook is for informational purposes only. Blackbaud makes no warranties, expressed or implied, in this summary. The information contained within represents the current views of the authors on the topics discussed as of the date of this publication; it is the intellectual property of Blackbaud, Inc. and may not be reproduced without permission. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc. The names of companies or products not owned by Blackbaud may be the trademarks of their respective owners. 4
CHAPTER 1: BUILDING A GRANTS MANAGEMENT SYSTEM 5
The temptation for an organisation to build its own software package is strong and, at times, justified. The decision of whether to build or buy a software package comes down to a few key points: 1. What is the nature of the problem and the complexity of the application to be built? 2. Does the organisation have the expert resources to build and support the application over time? 3. Is there time to build and support the application? 1.1 WHEN TO BUILD For limited, ad hoc applications If the problem is perceived as unique or highly unusual To solve a stand-alone problem that does not affect any other area of the business For a one-time solution with a relatively short life span If the organisation has a large IT department with sufficient expertise and is committed to remaining with the company for a long time 1.2 ADVANTAGES OF BUILDING Complete control Tailored to unique business needs Ownership of the software code 1.3 KEY CONSIDERATIONS Development Time One of the primary drawbacks to developing software internally is the time it requires from an organisation s human resources. For small, non-mission-critical applications, time may be less of an issue, but if the organisation is developing a complex solution for multiple users, or will potentially need to expand the usage to more divisions or sites, countless hours may be spent collecting and harmonising business requirements and configuring or writing code. In addition, the organisation must also consider the integration needs of the application between processes being built, as well as integration to other existing infrastructure systems. After the technology configuration is complete, more time spent testing, debugging and validating the system is required until the product and any integration will function according to expectations. Once complete, the organisation needs to be prepared for further changes and user requests down the line as the initial configuration and development of the application may not be quite right the first time. In many cases, optimisation for automating manual processes may not have been considered, requiring more thought in workflow design. Such re-design and re-validation further entails cost that may not be realised upfront in the initial project implementation. 6
If the organisation is developing a complex solution for multiple users, or will potentially need to expand the usage to more divisions or sites, countless hours may be spent collecting and harmonising business requirements and configuring or writing code. Training and Support No software system, no matter how good the design, will be effective without proper training. Often in-house software developers do not have the advantage of specialised training services to ensure that company employees have the knowledge they need to effectively work with the new system. Some organisations may have an effort in the initial rollout training, but what about ongoing training as employees change positions or new employees come on-board? Organisations must consider the resources needed and the cost for ongoing training efforts to maintain the built application s effectiveness. The question of support is a serious one. Unfortunately, things can and do go wrong with any software package. Users of the system will require support, and the organisation must have the time and resources to offer support when it is needed throughout the life of the built application not just during initial implementation. End-users typically don t become the experts. Organisations must include the overall cost of building their own internal helpdesk or specialised IT department and look how to maintain and sustain the application when key IT personnel or champions leave, which may impact the overall system integrity. Organisations must consider the resources needed and the cost for ongoing training efforts to maintain the built application s effectiveness. 7
Staying Current It goes without saying that both technology and business can and do change significantly over time. The software application designed to meet a need today may be out of date in just a few years or less. Software applications need to be flexible to meet change and adapt quickly to new technology. Some of the challenges organisations may face after developing an in-house software package include: New versions of operating systems and back-end applications: Software vendors maintain large software development teams dedicated to updating their products to be compatible with the latest technology an advantage most organisations will not have. A software package built to work with the current version of an existing database, can easily be rendered obsolete with the next version. Some major retooling of the application and a lengthy data migration process may be required. This is especially true if the usage and set-up of the built application database is not standardised, extending the time and resource effort needed for change control in upgrades, updates or even process revisions. Changing business needs: Software systems must be adaptable. Business practices can change overnight and the software should have enough flexibility to quickly adjust. Access to a large client base gives the software development firms the distinct advantage in developing flexible software to meet a diverse set of needs. Integration with other applications: A good organisation will have the foresight to develop some level of integration with other critical business applications, for example Finance systems. Establishing those business integrations in tandem with a custom-built application increases testing and implementation cycles. Further evaluation is needed when new software systems, such as CRM or MES, are added after the initial rollout of the custom-built application. Even more development and long-term analysis are required for each integration data point, particularly if these applications themselves go through new version releases. A software package built to work with the current version of an existing database can easily be rendered obsolete with the next version. Some major retooling of the application and a lengthy data migration process may be required. 8
Competitive Functionality Software users are becoming ever more sophisticated, and they maintain high expectations from the software systems they use. To be successful, software packages must win the confidence of the user. In this area, in-house packages face tremendous competition from established software vendors. Professional software development houses create software applications with a depth of functionality and an ease-of use that is hard to match. With software development as their primary business, they have time to research the problem, collect input from the industry and customers, and develop best-of-breed applications. The big software development houses maintain development teams made up of the most talented and highly trained IT professionals available. They are experts in the latest development techniques that are necessary to produce a reliable, top-quality software product quickly and efficiently. For small, non-critical applications, an organisation s internal team might be more flexible and efficient than these software development firms. That changes, however, when mission-critical or enterprise solutions are required. Most in-house developers fail to produce a superior product, in less time, and at a lower cost than outside rivals. Most in-house developers fail to produce a superior product, in less time, and at a lower cost than outside rivals. Reporting When software is homegrown, the software developers need to build the data models by connecting the different database tables and developing the views. Sometimes, multiple tables might need to be connected and the right views developed in order to be able to extract certain data. This requires having people with the right technical skills for database management and report development. The report developers would need to be very familiar with concepts of RDBMS such as primary/foreign key relationships, right types of database connections, using the right data storage models, etc. However, since the system is custom built, business users can get the exact reports that they are used to looking at on a daily basis. Other Risks Turnover: If the organisation s software developer leaves the company, who supports the application? Malicious code: While the chances of an internal developer writing malicious code is unlikely, it can and does happen. The Back Door: A more plausible scenario involves the creation of a back door to the software. In this case, the developer sets himself up as a super user, meaning that he can do anything in the application, including removing system administrators. If the developer is also the application manager, this may not be a problem; if not, then you have just given an outsider complete access to the data you are managing with the software. 9
CHAPTER 2: BUYING A GRANTS MANAGEMENT SYSTEM 10
While an organisation may understand its business needs better than anyone else does, very few problems are truly unique. Purchasing software from a reputable outside vendor who has knowledge of your industry provides a base of expertise for solving business issues. Rather than reinventing the wheel, an organisation can take advantage of the lessons learned from other companies within your industry that have faced similar challenges. The question of support and maintenance must also be addressed. A custom, self-built system may solve today s challenges, but what happens when there is a problem? When technology, business and regulatory needs change, will the application be able to adapt? Outside software vendors provide a place to turn to for implementation, training and technical support. They are also better equipped to evaluate the marketplace and incorporate the latest technologies to address change. 2.1 WHEN TO BUY Niche sector solutions Complex user requirements Long-term investment 2.2 ADVANTAGES OF BUYING Ready-made solution Thousands of hours of research and development Fewer bugs Expert support and training Flexibility and adaptability Functionality is continuously enhanced through customer input 2.3 KEY CONSIDERATIONS Not All Solutions Are Alike There are two types of software vendors, each offering unique capabilities in helping organisations optimise their business processes tool kit technology vendors, also known as custom built vendors, and off-the-shelf preconfigured application vendors. While all software vendors spend time developing the technology that forms the foundation of the solution they bring to market, some of these software firms do not go beyond the development of the technology into tools and templates that help organisations build a custom application. Through marketing their technology, they have increased their knowledge about an organisation s business need for automated Grant Management practices, and successfully convert these messages into gifted demonstrations. However, although pre-configured templates and demos can be used as a kick-start to any application development effort, the burden still resides on the organisation to have the skill sets and resources to complete and test the end Grant Management application, and to train and support the end-users over its lifetime. 11
Tool kit vendors training and support is usually limited to the technology and templates but the vendor won t be able to provide the detailed validation, training and support for the actual application because it is the organisation that develops it, rather than the vendor itself. Through a careful evaluation process, an organisation needs to understand how the vendor will provide its solution not only initially, but for the long-term. A pre-configured, fully developed, out-of-the-box application will provide you not only the best practices and domain built into the software, but the long-term care of the application itself. Many questions and issues raised previously when considering building an application will still apply to evaluating application vendors to ensure that the organisation understands the complete solution it is purchasing and the total cost of ownership placed on its own internal team. In the end, if an organisation perceives it needs more unique functionality expanding beyond the initial intent of the solution, such as Grant Management, it may be best for the organisation to evaluate other technology vendors that are specifically geared in providing leading tools and technology for that sector. There are two types of software vendors, each offering unique capabilities in helping organisations optimise their business processes tool kit technology vendors, also known as custom built vendors, and off-the-shelf preconfigured application vendors. Reporting Any data in a database is useless if it cannot be analysed. Software that provides the ability to store data needs to provide powerful analytical capabilities which, in turn, enable valuable real-time reports and trending on key performance indicators. This, ultimately, enables better and faster decision-making. In a Commercial Off-the-Shelf (COTS) system, the application s database models are developed by the vendor. This enables the vendor to provide out-of-the-box or canned reports. The disadvantage of this type of system is that the format of out-of-the-box reports may not meet the exact reporting requirements of the organisation. In certain cases therefore, they may need to be used as a starting point and then modified. Considering the advantages, vendors with COTS systems based on best business practices typically provide very robust data models. These data models may already contain the requisite views and table connections required to pull the appropriate data. Additionally, since the system is maintained by the vendor, a customer does not need to engage personnel with the appropriate report development skills. They can simply request that the software vendor custom develop a report that would meet their requirements. In this case, the organisation will need to consider the additional cost associated with soliciting the vendor to develop the report. 12
Best Practices Programs, initiatives or activities that are considered leading edge are exceptional models for others to follow. Tried and tested management practices and work processes can lead to world-class, superior performance. A Best Practice is a technique or methodology that, through experience and research, has proven to reliably lead to a desired result. A commitment to using Best Practices in any industry is a commitment to using all the knowledge and technology at one s disposal to ensure success. However, demonstrated Best Practices can be slow to permeate within an organisation. The three main barriers to adoption are a lack of knowledge about current Best Practices, a lack of motivation to make changes involved in their adoption, and a lack of the skills required to do so. Some technology vendors who rely on delivering tools rather than fully functional applications may suggest that Best Practices means an inflexible solution. But in reality, the notion of Best Practices does not commit people or companies to one inflexible, unchanging practice. Instead, it is a philosophical approach based on continuous learning and continual improvement. The philosophy of Best Practices is not about reinventing the wheel, but about learning from others and implementing what has been proven to work. Organisations should look to its leading peers and competitors and leverage their success in terms of Best Practices. Today s organisations typically do not build ERP or CRM solutions anymore, but look to leverage the domain built into these applications. In evaluating Grant Management applications, organisations should look to similar experience in the applications and vendor which provide the Best Practices approach. The philosophy of Best Practices is not about re-inventing the wheel, but about learning from others and implementing what has been proven to work. 13
BUILD OR BUY? CHAPTER 3: CONSIDERING YOUR RETURN ON INVESTMENT 2016 BLACKBAUD, INC. WWW.BLACKBAUD.CO.UK/GIFTS-ONLINE 14
When organisations evaluate whether to buy or build software, certain costs are often overlooked. Tables 1 and 2 summarise the costs components for packaged software applications and internally built applications, respectively. Project management cost elements are usually similar for Buy and Build options, however initial set-up fees and ongoing costs can prove more expensive for build. Table 1: Cost Components of Packaged Software Project Management Fees Maintenance and Support Unforseen Costs Determine Customer Needs Licence Fees Annual Maintenance Schedule Delays Gather Requirements Implementation Fees Budget Approval Configuration Fees Software Evaluation Integration Fees Software Gap Analysis Customisation Fees Proof of Concept Modelling Annual Maintenance Fees Data Collection Training Evaluation Table 2: Cost Components of Internally Built Software Project Management Fees Maintenance and Support Unforseen Costs Determine Customer Needs Software Model Creation On-Going Maintenance Business Gather Requirements Software Designer Tool Creation Software Upgrades Employees Budget Approval Software Module Creation Auto-Update Tools Scheduled Delays Software Evaluation Data Localisation Help Desk Software Gap Analysis Data Mapping Issue Tracking Tools Proof of Concept Modelling Data Migration Data Collection Testing Training Documentation Evaluation Rollout Model Development Web Development Country-Specific Versions Data Collection Pricing Product Changes Licence Monitoring 15
BUILD OR BUY? CHAPTER 4: SUMMARY 2016 BLACKBAUD, INC. WWW.BLACKBAUD.CO.UK/GIFTS-ONLINE 16
4.1 BUILD OPTION Customers may have unique business requirements which sometimes cannot be met by standard off-the-shelf systems. Business process requirements dictate that the organisations develop custom software in-house. The advantage of building software in-house is that the product will be able to meet 100% of the organisation s requirements. You define the requirements, you build the software and you maintain it. The disadvantages? The software is developed in-house and the domain knowledge that goes into defining the requirements is limited to the expertise and experience of a few people within the organisation. If a few key individuals within the application development team decide to leave the organisation, a big chunk of knowledge walks out with them. A collective knowledge base from experts across the spectrum of the market segment is always better than relying on a few individuals within an organisation or having to source such experience in the market. Furthermore, as organisations move from a paper-based, manual system to an electronic system, people tend to define their existing processes as requirements for an automated system without much thought on how the process can be improved upon. Without the expertise or skill sets, the end application may lead to an ineffective process being automated. Deficiencies in such a process may quickly surface through automation, causing an organisation to potentially redesign the application incurring more time and cost. 4.2 BUY OPTION A good commercial off-the-shelf application is typically developed by a vendor after studying the market requirements across a variety of industries or from a specific segment such as Grant Making. Vendors that focus on a specific market segment tend to make an effort to better understand the requirements by involving their existing customers as design partners in a good product development strategy. Since their business is software development, they understand the cutting-edge development and the new trends in technology, and would be more likely to include the new trends as part of their continuous improvement strategy. As a result, the organisation receives processes or workflows, along with business logic and data models that have been tried, tested and improved upon by different organisations. The vendor does all the work in terms of gathering the business requirements relating to how and what data should be collected, what steps should be completed for a particular process, and builds this depth of domain into its application. A vendor focused on a specific market segment would maintain appropriate personnel with the required and most current domain expertise to gather required data and incorporate it into the system. Furthermore, from an integrated compliance perspective, multiple systems would need to be integrated to provide a single global view of the state of the organisation s grant making activities, and to ensure that there is a closed-loop process in place. This may include the need to determine the number of people to be trained on the documents that are being released. The best value to a customer comes from a vendor that can provide many of these integrated process models out-of-the-box. Best practices dictate that a good COTS system should intend to meet a customer s requirements 90-95% out-of-the-box, while providing them the flexibility to tailor the system to meet their unique requirements. 17
4.3 KEY CONSIDERATIONS SUMMARY Finally, before making the decision as to whether your organisation should build or buy a Grant Management System, you should consider the following questions: Do we have resources to build an application and all its reports? Do we have resources to maintain and support a custom-built application including all necessary changes? Do we have time to assess all requirements and business processes to ensure that effective process are being mapped into the new automated solution? Do we have time and resources to validate and continue to re-validate the custom-built application? Do we have experience in evaluating the best approach to setting up the IT infrastructure for the new application solution across the organisation? Have expertise and resources in setting up an internal helpdesk to support the custom-built application? Do we need flexibility to model workflows for both corporate and our local sites in one system based on company Best Practices? Do we have the resources for developing and implementing continuous improvements in the application functionality and technology? Do we want the product depth and functional and external integration without developing it? Do we want to do everything through IT and key Quality personnel? Do we have the time, resource and expertise to build and sustain Quality and Compliance applications? If you establish that your organisation does have the required time, resources and expertise to achieve the tasks described above, then building a custom Grant Management System could be a viable option. However, if the answer to these questions is No, then the most cost- and time-effective solution for your organisation will most likely be to buy a Grant Management System, as building one from scratch will likely be an unnecessary drain on your time and resources. 18
About the Author At the forefront of the fast moving technology trends within the funding sector, Gregor McCall has spent the past five years delivering technology solutions to streamline the fund management processes, while freeing up staff resources. With over 18 years experience in the sector, Gregor delivers solutions to increase the efficiency and effectiveness of organisations. Through consulting with organisations to understand practices deployed, Gregor offers insight into creating a more responsive environment with effective processes, allowing organisations to deliver against their strategic objectives more efficiently. Gregor firmly believes a commercial off-the-shelf grant management solution is the best long-term investment. Gregor also works within UK s largest and most long established volunteer network of highly-skilled business consultants, volunteering his time to assist in delivering support to non-profit organisations to help deliver value in Leadership and Strategic Direction, People Management, Financial Management and Sustainability, and Performance and Impact. About Blackbaud Blackbaud is the world s leading cloud software company powering social good. Serving the entire social good community non-profits, foundations, corporations, education institutions and individual change agents Blackbaud connects and empowers organisations to increase their impact through software, services, expertise and data intelligence. The Blackbaud portfolio is tailored to the unique needs of vertical markets, with solutions for fundraising and relationship management, digital marketing, advocacy, accounting, payments, analytics, school management, grant management, corporate social responsibility and volunteerism. Serving the industry for more than three decades, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada, Ireland and the United Kingdom. For more information, visit www.blackbaud.co.uk. This ebook is for informational purposes only. Blackbaud makes no warranties, expressed or implied, in this summary. The information contained within represents the current views of the authors on the topics discussed as of the date of this publication; it is the intellectual property of Blackbaud, Inc. and may not be reproduced without permission. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc. The names of companies or products not owned by Blackbaud may be the trademarks of their respective owners. 2016 BLACKBAUD, INC. BLACKBAUD.CO.UK/NOTFORPROFIT/SCHOOLS 19
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