The Cost of Swivel-Chair Integration

Growing NFPs often fear owning custom technology, seeing it as something to avoid at all costs. However, this drives disproportionate costs and risks, particularly for organizations growing from around 100 people to 500 or 1,000 staff.

Beyond 100 staff, if you don't have some technology of your own, you're wasting money on admin instead of delivering client services. For every admin you bring on, you're effectively not delivering that person's salary in client services, and most charities rightly want to deliver as many outcomes and create as much impact as possible.

Also note here that those admin activities are often hidden in team leadership and other management roles.

In technology, no single system can handle everything from HR to finance to client management to payroll. This happens because vendors specialize functionally (HR, CRM, etc.) but they can't provide out-of-the-box integrations between their specialized system and every other specialized system out there. If there's no connector between systems, humans end up manually integrating the data (swivel-chair integration!), which works for small organizations but becomes a huge amount of work once you reach 50-100 staff.

Vendors simultaneously try to be as generic as possible within their specializations to serve as many industries as possible. They resolve the tension between functional specialization and a desire to be cross-industry by making the user interface as generic as possible, leading to less efficient user experiences.

For small organizations or systems used by only a handful of people, this doesn't matter much. However, for systems used by large groups, such as care workers, those inefficiencies quickly add up. If you're not click-efficient, you'll build up a hidden cost of humans taking the brunt of the pain. At around 100 staff, with say 30 workers, these inefficiencies warrant addressing with a thin layer of digital experience technology or an app to avoid workers using multiple complex backend systems and conducting a huge amount of that swivel-chair integration.

You need to be aware of these issues by talking to the masses, particularly workers and team leaders. Prioritize addressing things that affect a large number of people frequently. As a care organization, you need to develop technical capability. Under-investing in this has likely already caused cost-effectiveness issues and risks around data security and user experience.

While you can initially avoid hiring full-time technical staff, as you invest in efficiency through software, you need to hire someone who can manage technical resources and audit outsourced work. Insist on excellent documentation that another developer could pick up. Eventually, you'll need to bring technical solution-building capabilities in-house, which is easier than most people imagine.

Andrew Walker
Technology consulting for charities
https://www.linkedin.com/in/andrew-walker-the-impatient-futurist/