Applicability of MIS to Non-profit Firms

by

Mitch Robinson

Management Information Systems (MIS), as outlined in both the class-room text and the popular media, can obviously help profit-oriented corporations to excel in an ever increasing competitive environment. What is not frequently reported is that these same MISs can help non-profit agencies and organizations as equally well as the commercial firms. American Rehabilitation magazine outlines one application of a new MIS system to one of these non-profit organizations, Centers for Independent Living (CIL). CIL provides a link between people with disabilities and those that advocate independent living for those with disabilities. Thus, this organization provides a bridge between those needing information and those providing it. The focus of my analysis of the article by Mary Ann Lachat in American Rehabilitation magazine will be on the study of CIL's need for and implementation of an MIS system and that implementation's applicability to all non-profit firms.

Summary of Article

In the 1970's, CILs emerged as new organizations, formed by people with disabilities who took on leadership roles in developing and running programs. The programs that these groups developed emphasized self-determination and equal rights for the handicapped. These groups became organized in the late 1970's, and the CIL organization was formed as an umbrella group coordinating the activities of the previously independent centers. The impetus of the CIL movement was to provide a consumer-oriented service model to the disabled-rights groups.

As the CIL movement became more organized, program directors began to realize a need for internal systems that would enable them to document services and activities. Since the CIL movement derived all of its operating income from a combination of government grants and public donations, there was a tremendous need for accountability. The perception was that CILs were making a difference; however, no definitive proof could be provided to the non-profit's equivalent of share-holders (government and donators). Additionally , as centers developed and proliferated across the country, it became apparent that CIL directors needed better information in order to provide scarce funds to those centers most in need. It was determined that an MIS system with a central data-base could provide this capability.

Once the need for an information system was determined, CIL administrators contracted with a consulting firm to design and implement this system. The design process was grounded in the belief that independent living services have a very positive impact on the extent to which people with disabilities lead productive and meaningful lives. Thus, the consultants were informed that the MIS must enable the community-based organizations to demonstrate this impact. The development and pilot testing of the system began from the premise that it would be a user-driven, field-based system. One key feature of this design phase was that it drew extensively upon the perspectives and insights of the staff who had operated the centers and who had provided the services.

During the MIS development, several staff members noted that the system must provide two way flow of information. Specifically, the system must:

· Provide operators with explicit operating procedures. Thus, the MIS system would serve as an expert system, providing CIL operators with detailed procedures for any conceivable situation.

· Provide evaluation capacity that would support internal decision making. Thus, the system would act as an analysis tool for top level management.

· Provide centers with a clear and systematic means of gathering concrete evidence of success.

· Provide both centers and their corporate staff with a means of reporting and analyzing costing information for both accountability and more efficient expenditures.

By incorporating the desires of the operational staff during the design process the contractors for CIL ensured that the MIS would be user friendly with minimal required training costs. Furthermore, since any successful implementation of an MIS must have the complete cooperation of the staff, CIL's actions were ideal to ensure employee acceptance. Indeed, CIL's MIS proved to be a resounding success. In fact, other federally-funded, community-based, consumer-oriented organizations began to contact management of CIL to discover how the MIS implementation could be applied to their agencies.

Applicability to Other Non-profits:

Interestingly, though the article deals specifically with only one organization (CIL), the information on implementing an MIS has applicability for any non-profit firm or government agency. Several important features of the CIL system emerge that reflect not only the information system needs of CIL, but also contribute to an understanding of essential MIS requirements for any non-profit ( and even some for-profit) firm. Specific attributes of the CIL MIS that have broad applicability include:

· Provides a framework and common definitions for services. Thus, even though CIL is comprised of many autonomous centers, with the new MIS, there is a shared understanding across each center about the characteristics of CIL's core services. Any MIS implementation at a non-profit organization must utilize a shared data base that ensures uniform access to details of the firms core services. It is this ability to provide uniformity that a group of semi-independent centers (or government agencies, etc.) to act as one cohesive unit. This concept builds fundamentally on Drucker's paradigm of "don't automate, obliterate." Thus, CIL correctly changed the very nature of their information retrieval system instead of merely automating their old method.

· Accounts for variations across organizations. In order to adequately provide information to each of the centers, CIL had to recognize that the technological skills at each center would be different. The MIS had to account for this variability and be able to provide detailed information to the technologically literate, while still not overwhelming the illiterate. Additionally, the information needs of each center would vary greatly. Any large organization with numerous autonomous units faces a similar situation. Thus, one tenant of non-profit MIS implementation for which CIL successfully accounted is: Keep the system flexible.

· Provides comprehensive information. In order to act as an expert system, an MIS must be prepared for every conceivable situation. Thus, for the CIL case, the system had to cover every funder, program, and service. Additionally, as the CIL evolved, services expanded greatly. The MIS had to expand at the same pace, such that the information provided by the MIS was up-to-date and relevant. Other non-profit organizations must also provide this level of comprehensive information if they are to provide services similar to an expert system. Note also that this level of information would not be possible without the integral assistance of the expert operators during the design phase.

· Supports a consumer-oriented approach. Frequently, analysts forget that non-profit organizations must also provide value in order to survive. Similarly to profit firms, this value must be rare and sustainable. Thus, an MIS for non-profits must support a consumer oriented approach. CIL implemented an MIS that emphasized that consumers, not staff, make the major decisions about their independent living goals. The system provided a framework for facilitating consumer development of an independent living plan and enabled CIL to track the multi-dimensional goals achieved by consumers. While the details will vary, all organizations must take this consumer-oriented approach to MIS implementation.

· Responds to external reporting requirements and internal information needs. In order to maintain public funding, CIL had to standardize its reporting criteria. The MIS was designed to strengthen organizational capabilities to respond to federal and state reporting requirements, as well as to support internal information and program management needs. These same requirements are applicable to any non-profit group.

· Provide for real-time on-line updating. In order to provide meaningful information, workers must have incentives to keep the central data-base updated. Thus, they must be trained, and they must have the ability for real-time updating. CIL provided this training and ease-of-use. Additionally, CIL updated its evaluation process, such that workers were evaluated at least in part on their ability to maintain the data-base updated. Any organization establishing a centrally located data-base must provide similar incentives, since the value of the information is directly related to how up-to-date that information is.

· Aid in strategic decision making. CIL correctly realized that any MIS that merely provided information for external reports would not be fully cost effective. In order to derive the most value from this system, CIL developed strategic decision making software into its MIS. Thus, in addition to the expert low-level decision making, CIL's MIS provided management with tools that could aid in strategic planning. Since executives most organizations require the same data as lower level workers, these groups can incorporate this decision making ability into their MIS at a fraction of the cost of developing one from scratch.

Summary:

To summarize, CIL successfully implemented an MIS that helped them to achieve their goals. Moreover, the information gained by CIL can aid other non-profit organizations in their goal achievement. However, much like profitable organizations, non-profit firms must follow Drucker's premise of "don't automate, obliterate" in order to derive the most benefit from an MIS. By following CIL's example, other charitable firms can successfully gain value from an MIS implementation.