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How to Cost and Fund ICT

The ICT Hub has just published the How to Cost and Fund ICT guide. It’s a practical guide and workbook which will help you plan ICT initiatives and make the most of your ICT funding applications, particularly explaining costs and benefits more successfully to funders. We’ll take this opportunity to summarise the key points, give you some guidance and hopefully prompt you to read and work through the full guide!

Introduction

Making effective use of ICT is one of the highest priorities for voluntary and community organisations and if it isn’t for you then it should be. Applied strategically and appropriately, ICT enables organisations to increase the impact of the services and activities and the efficiency of their administration.

We know its difficult to find the time to plan and there may be resistance to change but it is worth it!

Three basic principles for effective use of ICT

  1. Respect for your organisational culture – who you are and how you work
  2. Alignment with your organisational strategies – how can ICT help you do things better (and also do better things)
  3. Attention to your organisational capacity – don’t bite off more than you can chew (or sustain) and prioritise what you do

Knowing What You Need and Why

ICT decision making can be overwhelming and frustrating and it’s tempting to hand it over to the ‘techie’ in the corner. DON’T!

Your organisations needs will vary depending on your organisational size, your budget, capacity and resources. One size doesn’t fit all and the guide has some excellent guidelines for basic infrastructure.

You can and should share ideas and experiences with colleagues in other organisations. Don’t let the ‘cool tools’ and ‘new gadgets’ make your decisions for you.

You may not feel comfortable working through these plans/ideas on your own. If you need help, why not look for volunteer support (many IT professionals would be delighted to discuss possibilities with you) or use a local support agency or circuit rider or IT professional (see Suppliers Directory in Resources below) or even a colleague in a similar organisation. However, the Guide is designed for you to work through self-sufficiently so give it a go first!

What you need to start

Answer the following question…

Q. What do you do and how do you want ICT to help you?

ICT no-nos

  1. Don’t do something just because it comes up as a typical example
  2. Don’t buy something just because a supplier tells you to (you should seek independent advice whenever possible)
  3. Don’t do something just because a funder will pay you to do it (orphaned websites or stores of new unused computers are typical examples)
  4. Don’t feel you have to meet every criteria or do everything all at once (prioritisation is key and every organisation is slightly different)

ICT Benefits and Priorities

There are lots of ways that ICT can improve the work we do but we need to prioritise! Do we need to do things better, or do better things, or both?

Developing ICT outcomes is about building a strong case statement to justify an ICT initiative. Different people may support the ICT initiative for different reasons – keep all the good reasons at hand! Without a sufficiently strong case at the start, the ICT initiative will be more prone to fail.

A lack of rationale (or meaning) often leads to confusion and a lack of focus as the project takes shape and is implemented. Your decisions about the use of ICT need to be based on the full range of benefits, as well as costs, in order to effectively prioritise.

If there is one characteristic that sets effective VCOs apart from others, it is that they take the time to ensure that the time and money they spend on ICT is truly worth it. The best way to know if an ICT initiative is worth pursuing is to see if you or others in the organisation can articulate what the organisation will gain if it is successfully implemented.

The worksheets in the Guide will help you work through these issues.

The importance of a framework

Many ICT initiatives start and proceed without a clear sense of what the ultimate benefits would be if the initiative were implemented successfully. However it is more likely to be successful if there is clarity about what the benefits will be.

Even if you do not have the capacity to take on multiple ICT initiatives, going ahead with one carefully thought-out ICT investment has to be worth it if you have clearly identifiable benefits.

Making the case for your ICT initiative

At the core of any successful fundraising effort is your ability to articulate in a very powerful way why the funder must support your effort. Before that you need to justify it to yourself, and then to any other staff member or volunteer who will need to be on board.

Bring together different groups and people within your organisation to help get the ideas together. Focus on outcomes and particularly look for those who aren’t convinced by the initiative (‘bringing in the naysayers’). Winning them over will help you make the clearest case and provide better supporting evidence for your fundraising proposal.

There should be no mistaking what the objective of your ICT initiative is and what the outcomes would be if the initiative were to be implemented successfully. This is set out through a case statement – what you need, for yourself and staff, to justify why it is important to dedicate staff time and money to the initiative. It will be vital to win people over.

The worksheets in the Guide will help you be clear what you are trying to
accomplish and why.

What do you need to invest

ICT costs don’t start and end with the cost of a new PC. The key costs are:

  • Hardware & Infrastructure
  • Software
  • Internet
  • Training
  • Support
  • Consumables
  • Other

And remember you will need to replace your ICT equipment sooner or later.

We call all these costs the ‘Total Cost of Ownership’. A useful technology budget calculator is available from http://www.icthubknowledgebase.org.uk/calculatingtechnologybudget Remember time will be a key cost for you, whether it appears on your ‘bottom line’ or not.

You need to understand what the true total cost of ICT ownership (TCO) is – going beyond the hardware and software costs to determine the combined financial and human resource costs associated with ICT. This will help you determine which initiative will be most practical and deliver the best return on investment for your organisation’s capacity.

In many – if not most – situations, the cost of hardware and software runs at below 30 per cent of the total costs associated with preparing, launching and sustaining an ICT initiative. Time is a major budget cost from training through ‘getting comfortable with the system’ and in building and maintaining a relationship with a supplier.

Whatever the scale of the initiative, when it comes to ICT there are always hidden costs – both in terms of finance and other resources.
 
Ask yourself, again and again, “Can we truly fund this initiative adequately, and even if we have the funds, will we be able to devote adequate staff time?” If the answer to either question is “Maybe not”, then look at the initiative to see if it can be broken down into smaller parts that can be implemented in phases.

Keeping it independent

Suppliers do not always offer independent advice. Go for a truly independent consultant or volunteer or voluntary sector support agency. Make sure they’re telling you what you need to hear, not what you want to hear. If you can’t get recommendations locally or from trusted colleagues, it’s worth contacting the ICT Hub for advice.

Measuring success

There are many ways to measure your initiative’s success but how realistic are they? How many other factors could have influenced this outcome?

A simple way to assess the success of an ICT initiative is to focus less on the ultimate beneficiaries and more on other types of results. What are your indicators of success? You’ll need these to support your monitoring and evaluation component of your proposal. Remember, you can’t manage what you can’t measure.

Funding your ICT initative

“As a funder, if we’re going to fund technology for an organisation, not only do we need to know that the organisation knows what they need and can make good use of it – we also do need to see plans for how the continuous upgrade and continuous training pieces are integrated into the operating budget of the organisation.”

Well, who wants to pay for something that doesn’t make an impact and won’t be around in two years time?

VCOs that are serious about sustainable integration of ICT into their organisations:

  • embed financial costs of ICT into all their organisational and/or programme budgets
  • incorporate non-financial ICT costs into job descriptions and/or workplans
  • cover their core ongoing ICT costs through their operating budget
  • reach out for supplemental funding support very carefully and thoughtfully.

Funders are more likely to support you under certain circumstances.

You are unlikely to write a really good proposal if you are unclear about what your organization does, how it does it, and what you want to accomplish and improve with the ICT tools and strategies that you are seeking.

Being able to identify the full benefits of ICT, including how it will improve programmes, collaborative working, marketing or fundraising, is very different from articulating what you want to buy.

  • Focus on what a specific ICT tool and/or strategy might help you accomplish, rather than the technology itself
  • Make sure your descriptions are persuasive and clear – describe your aspirations without using technical jargon
  • The focus must be on the beneficiaries: the clients.

Working through the Guide will help you develop measurable indicators of success and plan how you will collect the data.

Ultimately, you need to connect the things you are seeking funding for to the funders’ interests and priorities – don’t make ICT an ‘add on’. Integrate your ICT budget into your organisational budget - it’s not an optional extra. Your budget should be clear about the total cost of ownership and you need to dentify how you will manage the recurring expenses of ICT.

Put yourself in the funder’s shoes. Ask yourself, how does a contribution to your initiative help meet the funder’s needs? Will the grant further their own objectives? How? If you want programme officers to support your proposal, make it easy for them to understand why. Remember that your proposal is in stiff competition. And be sure to present your proposal professionally.

Finally, consider how much free resource you could identify through the use of IT professionals as volunteers.

Conclusion

ICT is business-critical to the majority of voluntary and community organisations and articulating benefits and a strong case statement will be a great asset when you approach and negotiate with the funding community. Coupled with an accurate assessment of the total costs of ownership of this initiative and the likely outcomes, you will increase your chances of success significantly.

Whatever the size of your organisation, ICT has the power to transform the way you and your organisation works. Following the step-by-step How to Cost and Fund ICT Guide to plan, cost and fund your ICT will give you the skills to avoid making costly mistakes and plan, cost and fund your initiative innovatively yet realistically.

Remember to pay close attention to your and your organisation’s capacity to implement ICT initiatives and to your organisational culture, mission and strategic priorities. It will only be by understanding the full range of ICT benefits, which goes beyond efficiency improvements, and by understanding the total cost of ICT ownership, which goes beyond the cost of computers and software, that you realise these benefits.

Convincing funders to fund the total costs of ownership of ICT is never going to be easy but equipped with costing and funding skills you will be able to argue more strongly, confidently and successfully to ensure these costs are funded.

Even if you are not planning a small or a major ICT initiative tomorrow or next month, or maybe you are in the middle of a project which isn’t going quite as well as you had hoped – use the Guide. Dip into it as and when you need to help you help funders to help you take control of your ICT future!

The How to Cost and Fund ICT Guide is available for download at http://www.icthub.org.uk/export/sites/icthub/publications/How-To-CostFund-ICT_web.pdf

Resources

Footnote

The ICT Hub is working with the funding community and will shortly be sending out a Briefing to the top few thousand funders across the UK. We hope to help support them to support you.

Acknowledgements

This article is drawn from the How to Cost and Fund ICT Guide by Marc Osten and Beth Kanter of Summit Collaborative but some of the views expressed are solely those of the author, Simon Davey.

Simon Davey, preponderate.net
(based on the How to Cost and Fund ICT Guide by Marc Osten and Beth Kanter)

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