Software is one of the most difficult things to cost justify. Particularly when the software does not directly drive revenue, it becomes very difficult to quantify cost savings in operational efficiency and employee time.
When considering the Membership Applications Platform, or any membership software purchase for that matter, you should consider several factors in determining whether or not the software makes sense.
Perhaps the most direct question is also the most important. Time is money, especially the time of part-time or temporary hires for data entry tasks. It is crucial to understand how much time is spent on tasks that will be eliminated by the software you are prospecting.
Often, time spent can be quantifiable if it's spent on temporary labor that membership software would render unnecessary. An organization that must employ two temps to field registration calls during convention season can easily see a short-term return on investment on software that would eliminate the temporary staffing need. Other times, when data entry is performed by permanent employees, you must consider other factors. On the top of the list is the ability to focus on other strategic areas of your organization. “ARC’s software is extremely automated and they are excellent at following up with our sponsors and members, “says Betty Shanahan, Chief Executive Officer of the Society of Women Engineers. “Because of that, the staff that would normally have their hands tied up managing our career center can focus on strategic initiatives, such as marketing our career center and increasing revenue. It was hard to predict how much this would help us, but in the end, the value of being able to use our intellectual capital for higher level strategy rather than repetitive tasks was unexpectedly valuable.”
Other examples can be found in employee morale. Most organizations without sufficient technology strategies have employees frustrated at what they perceive to be unnecessary work. Happy employees are more productive and can get more done. Every organization has a different level of manual processes and thus a different level of frustration – but when presenting a software solution to management, don’t forget this intangible.
Take a step back and assess what your current processes, not just your current membership system, are costing you now. Many associations pay several thousand dollars per year in subscription fees to a software company – but because that company isn’t web based, they have to spend cash on data entry personnel and temporary employees. Look at the whole equation and understand what subtle costs will be abated or eliminated by a strong software solution.
Another intangible criterion is current support costs. With paper processes, a document must go into headquarters for processing. A member has no way to verify their membership other than making a phone call to headquarters. During key dates, you can readily anticipate a spike in call volume related to paper processing inquiries. Try to make an assessment – how much of that will an online verification process nullify? If a member can see their status, payment history, and chapter status online – how many phone calls will actually be made?
“Historically, we have always had a spike in phone calls right before our regional conventions,” explains Deborah Stokes, Meeting Planner for the National Society of Black Engineers. “It’s not just people checking on their memberships, but also chapters that need to verify their status. We used to have a difficult time fielding those calls and relied heavily on staff. Now, since they can see all of that with the MAP, those calls are few and far between.”
This is real time being spent and costs your organization real money – a solid understanding of your support costs is crucial for building a strong case for software.
The private sector has long since known that information about consumers, no matter how ostensibly irrelevant or insipid, can yield profound insights into serving them better. The same is true in the not-profit world, and many organizations are beginning to understand that. There is an intangible value in understanding your membership demographics. A solid comprehension of who your members are is crucial to any successful membership marketing strategy, and such comprehension is difficult to achieve when processing thousands of paper applications. Ask yourself – how much can I learn about my membership with software that they can interact with? What questions can I begin to ask that I couldn’t ask before? What don’t I know about my corporate sponsors?
Understand the revenue-generating potential of a software infrastructure decision. “Before MAP, we were using a company that took a huge chunk of all our job posting revenue,” explained Jeanne Sheehy of the Society of Women Engineers. “As soon as we switched to the MAP, we effectively doubled our revenue. We were able to pay for the software with increased revenue in a very short period of time.”
In addition to understanding the potential for new revenue, consider the intangibles. “With our previous career center provider, they weren’t linked to our membership database,” says Michele Lezama, Executive Director of NSBE. “We couldn’t get members to post their resumes, and as a result, we had a weak database that we couldn’t sell. Now that the system is tied together, we’ve been able to collect resumes at the point of membership – we’ve increased the resumes in our system six-fold, and we’ve now got a much more compelling opportunity to potential sponsors.” Efficiency and integration have interesting side effects, and sometimes those side effects have real value.
Understanding return on investment is the key to accurately determining whether or not the MAP is for you. To effectively calculate ROI, you will need to consider your organization and both the tangible and intangible costs savings. You will need to understand the features you’re getting and how they will effect your organization. Any software company espousing the virtues of an electronic system must be committed to helping you understand the potential for efficiency and creating opportunities for your organization to recruit more members, increase revenue, and save money. But in the end – you’ve got to sell it to the powers that be. Make sure you’re equipped with the right information.
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