Benchmarking can deliver substantial value
The quality and cost-effectiveness of back-of-house services has a direct bearing on the capacity of NFPs to deliver services to their clients.
Benchmarking can enable organisations to better understand the drivers of cost and quality for their back-of‐house functions and in turn make more informed and pro-active decisions about how their back‐of‐house services are delivered.
Tips for new managers of back of house functions
Benchmarking can also increase transparency and visibility around how back‐of‐house functions operate and shift attitudes away from viewing back‐of‐house functions as ‘administrative burdens’ to ‘key enablers’ of efficient and effective client service delivery.
Undertaking detailed benchmarking can take require a significant investment of time and resources within your organisation. It is therefore important to consider what level of accuracy and specificity you require the data you are using to benchmark and what value your organisation is ultimately seeking from benchmarking. This will help you to balance the cost and quality trade-offs between fast but less accurate accurate vs slower and more detailed measurement against a set of benchmark KPIs.
Bigger is not always better
Nous has worked with NFPs of all sizes and we have found that many organisations are able to effectively adapt their back-of-house service delivery models to match their size and client service delivery profiles. As a result, the economies of scale that would expect to find with larger organisations are not always evident.
There are certain things that good NFPs do well
In our experience, functional managers within NFP organisations that deliver efficient and effective back-of-house services tend to:
Maintain the baseline level of investment required to deliver quality services so as not to compromise the overall effectiveness and efficiency of their organisation
Determine the capabilities their organisation needs and focus on developing skillsets and hiring new staff skills as they grow (e.g. a bookkeeper does constitute a financial manager and a head of IT does not constitute a CIO)
Treat the rest of their organisation as customers and regularly seek feedback
Take a rigorous and professional approach to procurement and outsourcing
Adopt a start-up mentality and continually seek out innovative ways of doing things
Use data analytics to drive better decision-making
Use volunteers wherever possible to deliver services