Non-Profits Benefit From Business Process Management and Improvements

Non-profit organizations are near and dear to my heart. I have worked for several (hospitals, social service agencies, quasi-governmental) and have volunteered as a board member for three. I am a current board president for a global organization serving children in poverty in India and Cambodia (www.lotusoutreach.org) so this affinity for charitable organizations is fresh.  Not unlike their for-profit counterparts, non-profits want to deliver their services effectively, efficiently and produce the outcomes they’d hoped for at a cost that is at least equal to the revenue (donations) they generate. In other words, in their business model, it’s “ok”  to break even though not ideal. Reserves and income on reserves are much better than breaking even. If that equation sounds familiar to profit-seeking capitalists, it’s because it’s essentially the same equation. What’s different, of course, is the mission, customers are “beneficiaries”, and there are no shareholders to answer to…only a board of directors and donors. Quite daunting, actually.

Like investors, major donors and grantors expect to see results. The demand for performance indicators is, frankly, equal to the demand for metrics in any business. Philanthropists, after all, are almost always successful business people.

Enter BPM

All of the conditions that underlie and are so fundamental to business  – from HR and finance processes to supply-chain and customer service processes – are present in non-profit organizations. The value stream is clear, waste is common and the benefits of automation are real. The role of process improvement – driving waste and inefficiency out of processes while infusing them with information and visibility – is best evidenced in healthcare settings. Hospitals and clinics are the closest cousins to  non-profit agencies and are proving that the application of methods like Six Sigma and Lean in addition to standardizing processes for the sake of quality, compliance and shared services is in every body’s best interest. Emergency rooms around the country are now simulating changes in their workflow using BPM tools like ProModel and Visio diagrams are as common in some public health clinics as PowerPoint presentations. Healthcare has caught on to BPM.

Invest-able Change

I suspect the biggest determinant for hospitals’ and public health agencies’ enthusiasm for BPM has been their ability to pay for the consulting support they receive. It’s quite common to see firms like KPMG, Accenture, FCG, IBM, BCG and other global firms competing for BPM work with large state and federal public health entities related to Medicare and Medicaid as well as large county general hospitals who are taking great strides toward electronic medical records. The money is there so the consultants are eagerly positioned to deliver their BPM offering and support.

Most non-profits are of the social service ilk and have much shallower pockets. $300 and $500 per hour consultants in Italian suits are not an option. Similarly, top-flight MBA grads who have never imagined serving soup in a shelter or working with children in slums are not a good fit when it comes to maintaining the integrity of a process. The truth is, we’re out there. There are seasoned professionals and subject matter experts who bring to bear an abiding commitment to mission-driven work in addition to a proficiency in quality improvement and business process management.

Don’t Let The “B” Fool Ya

I think the hang-up people in the non-profit sector have with BPM is with the B.

“But we’re not a business. We’re not in business. We need to be effective, not profitable.” – I hear these refrains often and I gently remind folks that they are an organization of people, process, systems and tools organized to deliver a service or product to a consumer. And they get paid to do it (whether they’re volunteers or not, money is coming in the door somewhere). Non-profit does not mean broke. They are just as bound to a continuous need for quality improvement, safety, efficiency and measurable results. Anyone who doubts the future course of non-profits should take a look at the Gates Foundation expectations for efficiency and results. Donors care whether or not their contributions are paying for results or being squandered on wasteful practices.

BPM is in no way incongruous with the purpose, cause and mission of any non-profit. From this day forward, I pledge – when addressing the non-profits in my life – to use the term Organizational Process Management. OPM it is!

I’d love to hear how your non-profit organization benefited from or could benefit from some old fashioned OPM. Chime in…and thanks for listening.

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5 responses to “Non-Profits Benefit From Business Process Management and Improvements

  1. Non-profits do share some of the same processes as for-profit companies (Gauthier, 2008). A non-profit, such as the University City YMCA, is a business that has a focus on community service, and whose “profit” is their alliance with the community and the people themselves. With that being said, perhaps they should take some of the same business process management solutions as for–profit organizations.

    • Patrick Joseph Gauthier

      Emily – I have been involved in for-profit and not-for-profit organizations my entire career. Almost always simultaneously. I am the current President of Lotus Outreach International, work for a non-profit healthcare company and have business process management aims in both spheres of my work-life. Your point about “taking solutions” into your organization is right on. There are many methods and tools developed and refined in the private for-profit sector (as well as the government sector) that can now easily migrate into organizations such as yours. The result – if executed properly – is enhanced stewardship of limited resources, more efficient relations with community partners and a higher quality experience for your people/consumers. Foundations, philanthropists and government funding sources increasingly seek assurance that programs are continuously improving and striving for “performance management”. BPM is one such improvement vehicle.

      All the best,

      Patrick

  2. I would like to discuss one point here. I’m working in the final thesis for my Master in Information Technologies about ‘How we can implement BPM in non-profit organizations’, and I realized that there is a big difference between non-profit and profit organizations, and that difference is the value chain. The purpose of BPM is to optimize the value chain processes in a competitive environment, but this feature is only applicable on profit organizations. In non-profit organizations you don’t have to change continuously your processes in order to confront a strong competency. But, BPM is very useful to implement support process (ex. Recruitment process, travels, etc). Support process are the same in both types of organizations, but the real purpose of BPM is implements the primary process i.e those process related with the value chain.

    All the best,
    Alvaro.

    • Patrick Joseph Gauthier

      Alvaro – thanks for your comments. I do want to push back on some of your assumptions though and I hope it is viewed as a help in your thesis work. Please do everything you can to promote the implementation of BPM in non-profit organizations. I have worked in them and for them for many years and when you consider that non-profits include government agencies, schools, healthcare providers such as hospitals, and social service organizations that manage things like disaster recovery, disease registries and vital statistics, then you can appreciate the applicability and value of BPM.

      BPM also has many uses and benefits that transcend the value chain in competitive environs. Creating “Value” is why organizations of all kinds exist. This may be a bit too philosophical but organizations exist because they do for individuals what individuals cannot do for themselves and that – my friend – is the very definition of value. Particularly when you add the element of cost.

      Employees derive value from lean processes and often it is intrinsic in that they feel better about the work they are doing.
      Customers derive many different forms of value from better, smarter processes that produce better outcomes. They gain free time, a solution they couldn’t produce themselves at the same cost and they solve a vexing problem whether that problem is a broken arm, hunger, a dire need for a book on Amazon.com or concert tickets.
      Shareholders derive a different kind of value from the improvements to the bottom-line including making investments in new staff, new equipment and pocketing dividends they can invest in other companies or in their foundations and philanthropic pursuits.
      BPM is beautiful that way. It really creates a “win” for everybody.

      Lastly, non-profits create value and compete. Make no mistake about either of those things. They require value creation (savings) in order to re-focus limited funds where they make a bigger difference. They create value in peoples’ lives all the time. They create value in donors lives. They create value in suppliers lives. They create value in their employees’ and volunteers’ lives. They compete vigorously for volunteers, employees, donors, funders, grants, media attention and everything else a for-profit competes for. The only difference between for-profits and non-profits is what they and cannot do with their profits. Non-profit DOES NOT mean “no profits”. That’s a very important distinction.

      I would be delighted to talk more about this as your thesis progresses. I hope this helps. Thanks for stopping by!

      Patrick

  3. Hi Patrick, thank you very much for you reply, this is very useful for my work.

    I agree with you, but I have many questions.!!, because the organization in what I’m working on is a little special.

    Please, I would like to talk with you by skype.

    I don’t know if you have time for that.

    You can see my email in my commentaries.

    Cheers,
    Alvaro.

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