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The topics discussed here grow out of the bread-and-butter issues that confront my consulting and software clients on a daily basis. We'll talk about prosaic stuff like Membership Management, Meetings and Events Management and Fundraising, broader ideas like security and software project management, and the social, cultural, and organizational issues that impact IT decision-making.

Saturday, November 04, 2006

Penny-wise or Pound-Foolish?

This morning we woke up to find that our furnace had died, and the house had cooled to 57F. Morning coffee under the quilt, and then a call to the heating folks. Turns out we need to replace the valve that controls the gas intake - parts and labor come to about $600. The furnace is over 20 years old. This could be the first of a long line of repairs. But $600 is a lot less than $6000, and we are planning a big trip later this year (more on that in these pages soon) , so we opted to conserve cash and make the minimal repair. It could turn out to be a bad gamble if the system needs to be replaced soon, but we are only betting six hundred bucks.

This is the kind of gamble smaller non-profits are forced to make all the time in their IT planning. And the problem is, the amount of their wager is often hard to compute. Last year I posted about this as it affects harware lifecycle planning. You may think you are saving money by replacing pcs only when they die - but what is the cost of this approach in terms of lost work time, hasty purchasing, too many OS versions, and vanished documents? Its a cost that does not appear on anyone's invoice, but it impacts your mission.

For-profit companies talk about the return on investment of their IT projects. "Because of this new system, we anticipate 15% less downtime, which should translate into 10% increased sales."
"Because of the new online registration system, we can lower the staffing in the call center. "
But the non-profit, especially the smaller organization, is less likely to have their hands on the metrics that enable this sort of ROI calculation. It's hard to cram "impact on mission" into a spreadsheet cell.

For example, we've just started to work with a small disability group who is very excited to be finally building a central database of their donors, volunteers, and service recipients. But the E.D. was a bit taken aback when their network guy called me to make sure I didn't go cheap on disk drives on their new database server. He wanted some level of redundancy to protect this new information asset. And to her credit the E.D. agreed that it made sense. She saw that while moving all their separate data sources into one repository will alleviate a lot of inefficiencies, it also adds a possible "single point of failure" and something needs to be done to mitigate this new risk.

But in the absense of hard metrics, it's just as easy for a non-profit exec to see these infrastructural issues as just another expense. Especially when he's not particularly tech savvy and on guard that his IT guru just wants new toys to play with. In ths case he can look for another warning sign that he is being penny-wise and pound-foolish: when he can't keep tech staff on board.

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