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Do you have the financial tools to cope with a disaster?

Posted by  Christopher Brewer

Recent natural disasters highlight the rigidity of generic financial systems. To remain agile, effective and compliant, you need a system that can help you accurately predict the need to change course, then do so successfully, quickly and effectively.

In your world of project-driven, non-profit organizations, is there ever such a thing as a straightforward event?

Hurricane Katrina, the eruption of Guatemala’s Volcán de Fuego, even the recent Hurricane Michael in Florida have confounded scientists and experts alike. The question is: does your organization have the tools it needs to operate in today’s climate of extreme volatility, uncertainty, complexity and ambiguity (VUCA)?

We’re not talking about the people, the resources, the funds. We mean the technology, systems and processes that provide flexibility and financial visibility to support the way you work as you react to unpredictable situations — while maintaining high levels of accountability and transparency?

Achieving the impossible

When any natural disaster occurs, humanitarian, non-governmental organizations (NGOs), international relief and disaster response agencies need to assess, plan and react fast.

They need to know what stock they have, how to get it to there, how many people they’ll need; who is on the ground and what finances are available. Once the agencies know it is feasible, they have to define the program and governance structure, allocate resources and create the audit trail.

The right tools for the job

To prepare for the unexpected, the functionality to run what-if trials and predictive scenarios is a God-send. From the impact of programs to the cost of realizing them and securing the necessary funding, capabilities like these are the best way to get a holistic, continuous perspective on operations. Does your enterprise system allow for this? Is it fit for purpose? Are you able to Improve more lives with the right technology?

Many NGOs still use fragmented, rigid back-office systems or outdated enterprise resource planning (ERP) solutions which have been repeatedly customized for the NGO market. That won’t cut it with such high levels of VUCA. These traditional ERP solutions were designed to support predictable sectors, like manufacturing or traditional logistics, which are based on products, not people, and designed for stability, not flexibility.

(You don’t need us to tell you that these structures don’t fit the world of the project-driven NGO; and it will come as no surprise what comes next.)

Agile, effective, compliant

To remain agile, effective and compliant, you need a system that can help you accurately predict the need to change course, then do so successfully, quickly and effectively. All the while you need the ability to create new programs, adapt existing ones and shift resources just as well.

You can’t possibly do with a generic financial system; the extra cost resulting from its use may steer you away from your mission.                                                                                   

Think about how many structural changes take place in your organization on an annual basis; how many new projects you start each quarter; the number of people allocated to different regions each month.

Think about how much time you spend gathering information for donor reports from disparate, offline systems, and hard it is to provide management reports with all these constant changes.

Project-driven non-profits like NGOs must turn to solutions built on a foundation of project and people-based operations, with proven abilities to empower impact-laden activities. With tools to drive excellence, organizations can begin to unlock their own capabilities, freeing them to find the value in their own strategic insights and execute accordingly.

Insights and control = productivity and success

With the right solution — one that’s built specifically for organizations like yours, you can create more space for your people to do work that really matters:

i.e. spending more time helping the people that need it the most.

With the right solution you can stay in control of your finances and keep track of funding and costs, while maintaining your accountability to donors. You can deliver instant visibility into program performance and align your organization’s strategy to project plans and budget.

The right ERP will allow you to minimize back-office costs while freeing up more of your people’s time and resources to focus on program delivery. This, in turn, will allow you to maximize the social impact of your projects, while staying within budget and compliant with donors’ demands.

We know how hard it is to change enterprise systems. But, with the latest digital tools, you will have the insight and platform to be better equipped react to unpredictable situations.

Thanks for reading.

Does your financial system help you combine stability in execution with  flexibility of new project creation while meeting the financial constraints of the organization and the requirements on accountability and transparency? To see if your NGO is using the right financial system (and one which is not disrupting its mission) download: Manage NGO Volatility And Change.

Christopher Brewer

Chris has more than 25 years experience working with some of the world's largest Not-for-Profits and NGOs to enhance their technological capacity. As a Global Lead, Not-for-Profit, Chris focuses on helping leaders identify and address changing patterns in philanthropy and shifts in technology to ensure their organizations' ongoing success and increase social impact.