Friday, January 30, 2009

Don't Shoot The Database (Or Me, Please)

There are only so many times that I can take being told that a database is rubbish when actually it has nothing to do with the poor database, and everything to do with how an organisation is working. This was brought home to me again recently when I was asked by two organisations how they could improve the usage of their databases.

The first was a small charity who were using a good, industry standard package for their fundraising operations, but, they said, "it just isn't helping us". So what sort of fundraising do you do, I asked. "Well," they said, "we don't really have a plan as such. Last year the chief exec's daughter did a door drop to a few hundred houses in Hampstead, and this year we thought we might do some DM, but we're not too sure yet."

And you think the database is rubbish?! Please. If you don't have a fundraising strategy, if you don't know what sort of fundraising you will be doing, then how can you blame the database for not helping you? Yes, I know that part of my job as a consultant is to ask questions and dig deeper and find out if there really is more to it than they are initially saying, and of course I should help explain what a database can do; and I have no problem with anyone who says "I don't know exactly what I want from the database because I don't know what it is capable of," - that is indeed my job to help elucidate - but don't attack the database if you don't even know what sort of fundraising you are going to be doing in the first place!

The second case was a mid-size membership department in a larger organisation. They too told me their database wasn't supporting their operations and to be fair to them, it isn't the best system I have seen. But when I started to ask questions as to how their operations worked, it soon became apparent that there were distinct political issues between the membership and development departments. Not only that, but membership income was dropping, the benefits system they offered was in a bit of a mess and even their IT department was refusing to help because the membership department were buying their own equipment regardless of the organisation's overall strategy.

But, again, it was the database's fault! Now, yes, I realise that this was probably as much a frustrated rant on their behalf as opposed to necessarily a real belief that the database wasn't supporting them, but it doesn't help them or me if the IT systems are blamed when it is the underlying organisational system that really needs addressing first.

What both the above cases help emphasise is one of my most fundamental beliefs about why a database is or is not successful for an organisation: unless you have got a sound fundraising strategy, membership strategy, IT strategy, communication plan, organisational structure, solid management and so on, then it doesn't really matter if you have the best database in the world – it won't be able to help you in any meaningful way, or at least as well as it could be doing, until all these underlying factors are put in place. I know (at least I hope) this sounds obvious, but clearly it had slipped the mind of the above two organisations.

So go ahead, slag off your database if you want to, but, please, have a good look around you just before you do...

Thursday, January 15, 2009

Do you own your own data? Are you sure?!

I heard a rather shocking story recently of a charity who, when they tried to move their data from their incumbent database supplier to a new database they had purchased, were told by their existing supplier that they (the charity) did not actually own the data, the supplier did! And, therefore, the charity would have to pay the supplier in order to have the data!

Unfortunately, when the charity checked with their legal advisors, they confirmed that the contract they had signed with their incumbent supplier did indeed state that the supplier owned the data. In the end, the charity decided that rather than go through what could be a long and costly legal battle, they would pay the supplier what they were asking for.

Although this is very sad, I have to say I don't blame the charity for deciding to do that. I don't know whether such a contract would stand up in court but even if it did not then I am sure that the time, effort and aggravation to get to that point would be awful and the cost could well outweigh the amount the supplier was originally asking for.

I think that what shocked me most about this was that a supplier should even consider saying that they owned an organisation's data, regardless of whether it is a charity. It wouldn't seem fair to me even if it was a commercial organisation who was using the database.

So the moral of this story is to check your contract very carefully when you are buying a new database - or using an ASP/hosted solution - and if in doubt then get legal advice. Don't be left in a position where you don't own your own data!

Monday, January 05, 2009

Supplier Acquisitions: Should You Buy Into Them or Say Bye?

In the last few years, acquisitions have increased in the charity database market: Blackbaud have acquired eTapestry (and before that, Fund-Master and AppealMaster), as well as ticketing and gift-aid systems; Systems Group bought Minerva, and then CSG bought Systems Group, and also Consensus and Care, and then IRIS bought CSG... Then ASI Europe acquired Fisk Brett and IRIS bought Donor Strategy. (And I've lost track of who originally sold the product now sold as Affiliate by RedSky IT). Not that this is unique to NFP suppliers of course; Oracle, for example, has acquired several direct competitors including Siebel, JD Edwards and PeopleSoft.

But what did this mean for the charities who originally bought these systems, or for those who might buy them or others in the future? Well, the positive spin from any acquisition is of course that it will improve investment, product development, support and, where appropriate, provide what is often called an "upgrade path" to a "better product". On the downside, you might find that any meaningful development ceases on the product you bought. Or you are encouraged to migrate to a different system in the new company which you did not buy, you do not buy into and which may not be so appropriate for your needs - and you might even find costs increase, whether directly or indirectly.

One reason for such procurements is when a smaller company who has initially developed a very good system simply can't afford to develop a replacement system when new technology dictates they really need to. As such, although the "upgrade path" is what Fund-Master and AppealMaster users received when Blackbaud acquired them, a migration path to The Raiser's Edge would have in the mid/long term definitely have been a benefit, although some AppealMaster users may not have believed that initially. And as The Raiser's Edge could quite easily manage the functionality of both systems, commercially for Blackbaud, it would not have made sense to continue to develop multiple systems.

IRIS, on the other hand, have continued to sell and support all the products they have bought (the same path which Oracle has taken, incidently). Thus, you can still buy Integra, Charisma, Care, Donor Strategy, Consensus and Profile Concept. I am not convinced as to whether this was the plan when all these companies were acquired by CSG but it seems to be the way IRIS are heading at the moment. To be fair to IRIS, there are different parts of the NFP sector which could benefit from (some of) the different packages in their stable; although in practise, I would consider some of them to be "more flagship" than others. And there is no doubt that there is considerable overlap in functionality across several of the databases.

Donor Strategy is an interesting acquisition because, at least historically, it has been oriented at the small-medium NFP organisation. I do hope IRIS keep selling the package as such because there is no doubt that this part of the sector needs good, cheaper solutions, and to replace it with a Care or Integra would be complete over-kill for such charities. IRIS are at least saying the right words for this, stating that it will "specifically extend its reach in the SME charity and membership market" and Donor Strategy's ex-MD, Jonathan Air saying it will "provide a safe future for our company". I hope so.

Whether IRIS do continue to sell, develop and support all their systems remains to be seen. I could personally see some of them merging more easily than others, and some would probably benefit as such. Not that it is necessarily easy for a supplier to simply migrate a group of their customers from one system to another. Some years ago, one major supplier in the market seriously considered purchasing their main competitor, but they ultimately decided against it because they realised that, at the time, they simply couldn't offer the same functionality in their existing product but they would not have wanted to continue to develop both systems.

Similarly to IRIS, ASI appear to have made a commitment to Fisk Brett's ProgressCRM. In a recent interview on NFP Techno, Robin Fisk confirmed that "Both iMIS and ProgressCRM co-exist under the ASI global brand" and "longer term, we will be able to plan development so that users of both packages can benefit from the same developments." As with Donor Strategy, I do hope that this is the case. ProgressCRM is an excellent product with a confirmed user-base and it would be a loss to the charity sector if it did not continue.

But if acquisition seems a harsh route as a user then consider users of DonorBase, AKC or any number of other smaller suppliers, all of whom went bust without any supplier-provided migration path to another system. And there are many companies still selling their systems but who are failing to really keep up with new technological developments and/or provide good quality support (or, some would say, even provide decent software).

So what if you are about to buy a new fundraising or membership database? Well, who knows whether any company will be bought tomorrow, or, worse, who will go bust? I would not have thought CSG would be bought but they were. Key to good procurement are issues such as due diligence on company information, considering access to the data/database, open standards and support contracts as well as points such as Escrow.

There are of course many independent suppliers still, such as ESIT, Redbourn, Saturn and Centrepoint. Will they remain independent? Time will tell.

Thursday, January 01, 2009

Microsoft CRM: A New Old Kid on the Block

So the start of a new year seems the right time to make my predictions as to what will be happening with the sector database market for fundraising and membership systems. One un-surprising prediction is that I expect there to be even more consolidation/acquisitions amongst the database package suppliers. Even in the last few months, IRIS have bought Donor Strategy and ASI have acquired Fisk Brett. But who will be next and what will that mean to users and charities? Well, that's something I'll address in my next blog...

My main prediction is that this year will see the emergence of Microsoft CRM as a real competitor to the traditional fundraising/membership systems. This is because of several new benefits realised by the most recent release (v4):
  • Flexibility. There has been an increasing awareness over the last few years amongst the medium to larger charities that package solutions are not always flexible enough for many of their extended wishes and requirements, and/or users want to customise systems more themselves. The more savvy package suppliers have already realised this constraint and the next generation of their packages are already being designed with this in mind, so that although a solution may still be based on a core package, they will offer far more scope for bespoke development or in-depth customisation around the package but still with future-proofed upgrades.

    And this is where Microsoft CRM looks good. Adding fields and forms, changing field and entity names, and even workflow, all this can be done without any programming knowledge. And if you want more then customisation using dot net is fully integrated.
  • User Interface. CRM's user interface is built-in to Outlook or a web browser. This is a signficant thing. If a user can click on their InBox and Calendar then CRM is just another click further down. The basics really are that easy.
  • Improved data query tools. This is a key area of functionality and Microsoft has significantly improved their querying, reporting and data extraction tools in v4. Reporting uses Microsoft Reporting Services with the ability to drill-down directly into records and although ad-hoc querying may still not be quite as good as some of the leading fundraising packages, a more experienced user can do reasonably sophisticated queries and segmentation.
  • Cost. Purely in terms of licenses, CRM is inexpensive. This is of course only one part of any implementation cost - a signficant CRM implementation will still not be cheap - but at least the software itself is good value.
  • Beyond fundraising... By definition of CRM's background, it is not limited to fundraising or membership. If you want to incorporate your volunteers, suppliers, other contacts etc, then you can do this. Of course, many fundraising/membership packages can also do this so it is not unique, but it has a very good base to start from.
Of course, this last point also highlights the fundamental downside of Microsoft CRM which is that it does not come with any standard fundraising or membership screens or functionality. Users or suppliers will need to build that. The key area which will need development is probably going to be income: donation structures, gift aid, direct debit management and claims, pledges and so on.

But it's an interesting time for database technology in the sector - watch this space to see if I am right about how it develops!