Do Good Better

Nice Piece on Cookstoves in India with NetSuite.org Grantee Envirofit

Interesting to hear about the positioning of cook stoves as a component to reducing global warming. The  global environmental impact is definitely not the big thing (though every little bit helps)... the big thing comes from health improvements and building entirely new self-sustaining livelihoods selling and servicing the stoves.

We at NetSuite are happy to make a small contribution to Envirofit's work by providing the financial and operations software to support Envirofit's expansion in India.

Saving Money & Improving Performance: Outsourcing Charity Finance and Accounting

The Meyer foundation has a great report on how small charities and nonprofits can benefit from outsourcing back office functions... "Outsourcing Back-Office Services in Small Nonprofits: Pitfalls and Possibilities."

Three of their key conclusions were:

• Outsourcing may not offer short‐term cost savings, but can offer significant long-term benefits and savings.
• Executive directors need to develop the skills required for successful outsourcing.
• Entrepreneurs and businesses that offer outsourced services have a significant opportunity to create new business models to serve more nonprofits.

Other, slightly more salesy folks have identified other benefits:

• Outsourcing costs less than internal staffing;
• Outsourcing provides a higher level of expertise;
• Outsourcing results in more timely, accurate, and meaningful financial information;
• Outsourcing improves business process and controls; and
• Outsourcing eliminates risks associated with poor internal hires.

We think this is an import area that NetSuite.org can make a difference. Our cloud-based accounting and back office software makes it significantly easier to outsource, far less risky to outsource, and allows outsource providers to provide better services at a lower price.

This stems from two things:

• NetSuite donates our software to charities. A mid-size charity with 2-5 accounting users would pay $0.
• Our software is cloud based and accessed through a web browser.

With cloud-based accounting software, outsourcing can be as simple as giving your vendor a login. They can now manage your finances from anywhere they have access to the Internet securely and efficiently. There is no need for your accountant to make a visit to your office. Tasks can also be easily divided up between your accounting provider and yourself... you might enter the bills and the outsource sets up your chart of accounts and prepares your tax forms.

Since the software is yours, there is minimal risk if you choose to change vendors. Just cancel one vendors login and create a new one for your new vendor.

Finally, for outsource accounting providers, NetSuite's powerful software platform allows you to create time saving reports and customizations and maintain them across your entire customer base.

NetSuite.org is proud to support two social enterprises and their clients in this emerging space:

• Res Non Verba Asociación Civil 
• Easy Office

Email Marketing Basics: NetSuite.org can't give you strategy, but we can donate the tools

Our friends over at Idealware published another great  article, "Getting Started with Email Fundraising." As they point out, "Email fundraising is a technique that's within the reach of the smallest organization," and we're proud to provide a complete solution for email marketing as a part of our product donation to charities and social enterprises.

Did you know that our product donation includes 120,000 email per year?

Now, of course, if all you need is to send out an email newsletter, NetSuite is going to be overkill for you. But if you want to track you donors, donations, communications and financial data all in a single system without trying to figure out how to integrate your email tool with your donations tool with your donor database with your accounting system, then a donation from NetSuite.org might help.

So how do our grantees use NetSuite for email marketing? 

1. Strategy & Story 

Software just isn't much help here -- only you know your organization and your donors well enough to make good decisions about strategy and story.

But software can help you understand more about your donors through historical data. And with the stronger understanding you may be able to form better strategies and better stories.

• Use NetSuite's campaign functionality to do A/B testing. This allows you to determine which of two email messages yield the best revenue. It's also a great way to test 3 or 4 different stories and determine which ones resonate best with your donors.
• Our grantees also look at past donations by lead source to understand when and why donors engage with their organizations.

Software capabilities can also influence some strategic decisions.

• Should we segment or not? You can send a single message to all your donors or you might send different messages to those that live in California vs. the rest of the country. Functionality like NetSuite's dynamic groups makes segmentation easier.
• Should we test multiple messages? This is where A/B testing capabilities help.

But like all technology it is easy to get seduced by the latest and the greatest capabilities. We tell our grantees to get comfortable sending out basic email fundraising appeals before they even try adding segmentation, lead sources or A/B testing.

2. Design your email flow

For basic email fundraising, our grantees generally use our campaign functionality to schedule the different emails. If your campaign consists of 4 emails going out over 4 months, you can set up a single campaign at the beginning of the campaign and all those emails will go out automatically whenever you schedule them.

Some of our grantees get a bit more ambitious and use dynamic groups to change who gets the 2nd and 3rd email... if you donated during the first solicitation, you wouldn't get another solicitation on the 2nd and 3rd email, but would get a thank you email with a request to pass it along to your friends.

The folks that get really ambitious (and have the skills or money for consultants) set up drip marketing systems based on the responses and actions of individual donors.

3. Build an email list

NetSuite makes it easy for people to sign up through online forms that can be embedded on your website.

If you're using an email append service, you might chose a NetSuite partner (www.suiteapp.com) or us our simple import/export functions to export your contacts without emails and reimport them to add the emails.

4. Write effective emails

A key element of any effective email is personalization. With NetSuite, your emails can be mail merge documents, personalized with virtually any information about the donor from their first name to their favorite color.

5. Choose a donation tool

We have grantees that use a wide range of donation tools from a simple Paypal page to NetSuite's native ecommerce capabilities.

Folks like Canadian Food for the Hungry have really taken advantage NetSuite's native ecommerce functionality. The benefits of this is mostly that there is no data import/export or human intervention. The donor enters their information, the money goes to the organization's bank account, all the accounting entries are made, all without a muss or fuss.

6. Measure Success

This is where a tool like NetSuite really shines with real time tracking of donation volumes, sophisticated tracking of lead sources and donor behavior.

One of the things we stress to every grantee is that NetSuite is a tool that is designed to support your growth and success. We're trying to help you do good better. But like any endeavor, the key is to start small, expand and get more sophisticated as you go on. It's fine for a grantees to start with a simple email blast to a Paypal donation page. You don't need a system like NetSuite to accomplish that goal, but you know when its time to get more sophisticated, all the tools are right there for you.

Cloud Computing in Plain English: Four Plain English Benefits

Sonny Cloward turned me on to this video that explains cloud computing in plain English:
http://www.commoncraft.com/cloud-computing-video

At NetSuite.org we sometimes forget to focus on the basics, jumping right into the thrilling and exciting things that are possible with technology. For every potential cutting edge use of software like NetSuite, there are 50 mundane uses.
 
We recently had a conversation with a grantee that had huge transaction volume (millions of transactions a month) and wanted to create a 360 degree view of their constituents in a single system. That was one cool conversation and we were excited we could help them.

Yet, we jointly came to the conclusion that they should focus first on getting their employee payroll and expense reports automated to streamline their basic back office operations. Then maybe move the accounting into the cloud and eventually tackle the really cool stuff much further down the road.

This video reminds me there are really just a couple basic points that make cloud computing compelling for charities and social enterprises.

It is easier

As the video does a nice job of explaining, there are no servers to maintain and cloud solutions are simply accessed through a web browser.

The easy part does get oversold, no complex software can ever be "plug-and-play," but compared to on premise large swaths of complexity are eliminated.

It is cheaper

NetSuite recently commissioned a detailed Total Cost of Ownership study that makes the cost argument pretty compellingly for organizations that are in the 50 user range - the cloud is 55% cheaper than comparable on premise solutions.

One caution, the cloud doesn't take the business process implementation costs away, but it does remove significant IT costs. In the study, though the absolute cost is far less, you are still going to spend about the same percentage of your budget on consulting. 

Another of our grantees is currently going through the difficult process of converting their IT guys... folks that were comfortable fixing servers, to real IT analysts... folks that understand business process and code it into software. That is not an insignificant task, but they are finding that their IT guys can get a lot more support and partnership from the day-to-day business staff. Fundraising staff might not be able to fix a server, but they certainly can help build a report. 

It is more secure & reliable

People often worry about trusting their data to a cloud computing provider. For your average charity or social enterprise, the quality of the IT guy you can hire pales in comparison to the staff available to top tier cloud providers. Rather than having to hire a $150K sys admin, your organization can pay a subscription fee and get 10 of them.

Does that mean you'll never experience an outage? Of course not. But it means that the problems you will face will be far less catastrophic than if you keep your IT in house.

It drives innovation

Your IT organization doesn't go away with cloud computing. It gets refocused on your operations and your mission. Nobody runs around taking servers apart, they run around talking to staff about how to better meet the mission.

Measurement, Metrics, KPIs, RCTs, oh my! What to do First.

I really enjoyed this post on Randomized Control Trials by Andrew Wolk, the CEO of Root Cause.

(RCT is) a research methodology that involves randomly selecting subjects from a larger test group to receive an experimental product or service, is undoubtedly a rigorous way of determining whether a cause and effect relationship exists between a given service and a desired outcome.

He goes on to point out that this level of rigor can actually suppress social innovation because RCT evaluation is very expensive. As a reality check he provides a spectrum of social impact measurement, reproduced below.

What is your average charity of social enterprise suppose to make of all this? Should they be spending a lot of money early on to "prove" they are effective? How can you prove your effectiveness when you are still a start up just trying to get the basics right?

Where do you start?

1. Collect basic data
2. Report on basic data
3. Collect advanced data
4. Report on advanced data

This is actually an iterative process of collecting and reporting progressively more sophisticated data.

Step one might be to get some basic indicators like expenditures and clients served up and running. A software system like NetSuite gives you some of this data out of the box (expenditures) and can easily measure something like clients served. But so can a lot of other solutions.

Systems like NetSuite are useful at this level because they can provide Dashboards, allow you to define Key Performance Indicators (KPIs) and see data in real time. One of my favorite organizations, NTEN, a nonprofit membership organization, was awesome enough to publish their dashboard (download at end of the post).

Looking at the sample, you can imagine what the more complex iterations can look like and you also get an idea of how much manual work it can take to knit together data from various sources just to produce the dashboard in a tool like Excel.

This is another place that software like NetSuite can be useful - as long as you track the data in the system, you can report on it in real time.

But like all great things, there is a down side. A platform like NetSuite will do a lot for you, but it doesn't have the same depth of functionality as purpose-build software (for volunteer management or membership management, for example). For large organizations, this isn't a huge deal since they usually can afford the integration. But for small groups, you are generally going to face a trade off: 

• Easy dashboards and metrics at the cost of having just the essential functionality; or
• Expansive and deep functionality at the cost of expensive and difficult to maintain dashboards and metrics.

We argue that the value of having social impact metrics far outweighs the costs in terms of being limited to essential functionality. I like the analogy of a Volkswagen Bug... it will get you from point A to point B safely, cheaply and effectively and you'll hardly miss not having power windows.

How do you stay on Track?

Drop metrics as often as your add them. The metrics that you measure in an early iteration can become superfluous in latter iterations. Drop the metrics you don't use... delete them from your dashboard... you want to focus on the best data, not the most data.

Revised data collection often Systems like NetSuite make it very easy to collect data. This is actually a bad thing because you end up collecting more than you can use effectively. Every iteration should DROP data collection that isn't critical and only add data collection that you really will use.

The power of three Humans can focus in on 3-5 things. Use this in your KPIs... make sure that you only focus on 3-5 indicators. Any more, and you don't really know what is critical to running your organization.

It's all about Organizational Capacity

We donate powerful NetSuite operations software that can help transform an organization's internal operations and increase their social impact by orders of magnitude. But software isn't the thing increasing their social impact.

Capacity defines success

The benefits often ascribed to software are actually derived from the organizational and process changes that occur during the implementation of operations software. Too often, an organization thinks that they are buying a "solution" from a vendor. And vendors increasingly understand they need to sell a "solution" rather than a tool. The solution, however, doesn't come with the purchase, it comes with successfully navigating the process changes required by any software implementation.

One of the key elements that transform a piece of software into a solution is therefore organizational capacity.

IT Projects Fail

Various IT Analysts (Gartner, Standish Group) peg the success rate of software implementations in the neighborhood of 30% -- that means 70% of projects were implemented and did not meet goals or were abandoned. That failure rate seldom has a lot to do with the tool and more often has to do with the tool staying a tool and not becoming a solution.

As we applied this knowledge to our product donation program, we realized we needed to provide a model for grantees to maximize their ability to be in the 30% of successful projects or at least get as close to meeting goals as possible. This is critical to NetSuite.org's social impact since every failed donation actually decreases the social impact of that grantee -- the exact opposite of our mission.

This gets particularly complex because grantees come to us for a wide variety of functional requirements from accounting, to payroll, to fund raising, to social impact measurement, to budgeting, to business intelligence and far more. They're needs span a broad range of sophistication, with some looking for simple cloud-based accounting to supporting complex affiliate & subsidiary structures to complex grant & project tracking and more. And their capacity varies from software experts to folks that have trouble getting MS Excel to behave.

To get a handle on some of this complexity, we've developed a simple capacity model to help grantees understand the benefits and limitations of a software donation.

Organizational capacity refers to the organization's ability to understand, document, adjust and change their own internal business processes. This is a function of internal culture, capabilities and maturity. This has nothing to do with technology and everything to do with your business. If you are a homeless shelter, can you clearly document your process of intaking a client? 

Implementation capacity refers to the organizations capacity with implementing technology. Can you document the client intake process by defining each data field and each status change?

Purchasing Assistance Isn't Enough

Our key insight is that a grantee should not attempt goals out of line with their organizational or implementation capacity, UNLESS they can purchase assistance that can increase their capacity.

That means budgeting for professional consultants that can BOTH increase the capability to manage change within the organization (organizational capacity) and increase the organization's ability to implement software (implementation capacity).

NOTE: Our experience has been that consultants don't magically make up for low capacity... the consultant actually has to increase the organization's capacity. If the grantee's capacity doesn't increase during the implementation, the probability of success is low.

Most grantees are looking for software in the same way they look for a television - just show me which button to push to turn the thing on and "it just works." For organizations with high organizational and technical capacity, software like NetSuite, for the most part, "just works." For those trying to achieve goals out of line with their capacity, things don't work that way.

Other Interesting Observations

Grantee Success is Predictable

Grantees that attempt goals outside their level of organizational and technical capacity (either internal or purchased) struggle mightily.

Money Isn't Enough

If your goals are way out of line with your capacity, spending a lot of money isn't enough unless that money is explicitly spent to increase capacity.

Social Impact Comes from Understanding

With each additional level, the delta on social impact is greater. An organization getting their first database is probably going to achieve less change in their social impact than an organization moving from managing operations to improving operations.

Paid Implementation isn't Necessarily better than Self Implementation

There are a large number of organizations with mid to high implementation capacity that are trying to achieve relatively low-level goals. The real value of purchasing expertise is building technical capacity - complex software just takes a long time to learn.

More Expensive Implementation isn't Correlated to Success

The price and sophistication of implementation assistance is less correlated to grantee success than one might imagine. The act of paying for implementation assistance is more important than the quality of the implementation assistance since that signals a willingness to increase organizational and technical capacity. This trend can reverse with particularly sophisticated, cutting-edge and complex goals.

How it Impacts our Theory of Change

NetSuite.org's maximum social impact comes from moving existing grantees higher up the goal ladder -- from having a database to managing their organization to improving their organization. We focus on bringing in new grantees with simple goals and then supporting them as they move up the goal ladder over a period of time. Over that period of time, we need to continuously support increased organizational and technical capacity.

Simple goals mean a higher probability of project success. Moving them up the goal ladder means higher social impact. A broadly accessible donation program paired with a more strategic service grant program seem to fit this bill quite nicely, but there are lots of other components. The ecology available to grantees is more important than particular services.

In another post, I'll get into the specific things NetSuite.org does to maximize the probability of grantee success.

Magic in the Cloud for Charities and Social Enterprises

In part one I diffused some hype, in part two I poured some cool water. Today, I want to paint a picture of what cloud dreams can look like for charities and social enterprises. As always, we'll be heavily biased toward the experience of our grantees with NetSuite.

The super-cool cutting-edge cloud innovations really aren't the dreams I want to talk about. For that, you read Lucy Berholz's upcoming paper. In that world, you'll find out about peer-to-peer philanthropy networks, really cool social enterprise metric systems, new applications for change and more.

At NetSuite.org, we're more interested in the Treasurer of the Board, who often dreams of getting a financial statement showing restricted funding balances in real time rather than having to wait a few weeks for the finance guys to compile the spreadsheet.

The finance guys that dream of not exporting the hours worked from timesheets and a payroll into Excel so they can calculate the hours worked on each grant to generate a indirect cost percentage so they can split up the rent payment across all of the active grants. And if they have a particularly ambitious dream, no manual entry of journals into the financial system that are rife with error from all the hand Excel calculations. 

The development guys that dream of watching the donations in real time as they stream in, getting an automated email so they can personally call the donor that just gave more than $5,000, and avoiding the monthly argument with the finance guys trying to track down those 10 transactions in the donor database that doesn't match the data in Quickbooks.

The hybrid social enterprise that dreams of managing a nonprofit and for profit operations on the same software generating social impact metrics with data from both sides of the house. For a bonus, they throw in their country operations in six countries in 10 currencies all managed as independent subsidiaries.

You'll notice that most of these dreams have nothing intrinsically to do with the Cloud, whatever your definition Software as a Service (SaaS), Platform as a Service (PaaS), hosting, social media, web-based applications, etc.). The Cloud is just a tool, albeit a quite compelling one.

The magic of the cloud is that enables these dreams for more groups, more flexibly, at a lower cost, with best practices baked right in.

Treasurer's Real-time Financials

The Treasurer's dream of real time financials was a pipe dream with Quickbooks installed on the PC in the Executive Director's office and only the part time accountant really understanding how to use the software. Even with a top of the line system like Raiser's Edge, you can't just give your treasurer a login that shows them the relevant financial reports anytime they login from an Internet connected computer from their home, office or anywhere in the world.

The cloud enable this by being accessible through a web browser. Just enter your secure credentials and start running your organization.

Finance Guys and the Timesheet / Indirect Cost Excel Contortions

We had one grantee that took over two weeks to complete their month end reconciliation -- their Executive Director' data was always two to four weeks old, making it difficult to manage costs. The primary driver of this was their time & indirect cost calculations. At the end of the month, they had to chase their employees for their timesheets. Then they took all these Excel files and aggregated them. Then they exported some financial information. Then they spent a few days fixing all the Excel formula errors. Then they entered the journal entries by hand to charge various grants for portions of rent, etc.

The web browser goes a long way toward allowing staff to reliably and conveniently enter their time records. The cloud also tends to bring with it APIs - you can choose a web-based time tracking solution and tie it together with your financials (<ad>but why would you if you could use a unified, pre-integrated time tracking, payroll and financial solution like NetSuite?</ad>).

Real Time Donations and Reconciliations

This is one of those dreams that is already a reality with most modern donor databases. We have a grantee that was amazed that a donation could be accepted by a NetSuite webstore, show up on their donations dashboard in real time, get the payment processed by Paypal or Google, and after the payment was approved hit the general ledger automatically. All without a single import or export of a csv file and without human intervention.

The cloud supports this dream primarily through API integrations that would allow an online donation to automatically be entered into a donor database and then another API connection to a financial database. It also facilitates the hybrid products where a separate cloud financial system and a separate cloud donor database. 

Social Enterprises with Complex Global Structures

This is one of those dreams that social enterprises are just beginning to realize they have. As they grow and mature, they need to do business in multiple countries with multiple currencies and multiple legal structures. To manage their overall social impact across different entities, countries and currencies, they need to tie it all together.

Web-based solutions and API integrations can go a long way to solving these problems for global social enterprises.

Are You Dreaming Now?

For everyone that wants to run out right now and get a NetSuite donation because the Cloud is going to fulfill all their dreams, read this post again. In detail. Enjoy the reality check. Be inspired to begin the work required to achieve the magic.

Cloud Dreams or Cloud Realities for Charities and Social Enterprises?

Last post, I provided a little reality check on the whole Cloud hype. Now it's time to pour a little more cool (not cold!) water.

Earlier this year, Holly Ross, the Executive Director of NTEN, got a bit breathless about all the magical things that the cloud enables, laying out a really cool vision:

In the cloud, we can share client service data with other organizations and map it against the need demonstrated by census data. In the cloud, we can create visualizations of our data that make those multi-colored spreadsheets finally make REAL sense. In the cloud, we'll be able to record even more of the ways our constituents interact with us, and interpret what that means. 

I actually prefer the video myself since Holly can get a little excited about the whole thing.

The Cloud dream that Holly lays out is pretty compelling, but the reality is that it takes a lot of boring work in the back office to achieve the vision.

• Before you can map client data, you have to enter it. Better yet, you have to collect it in the right format to enable mapping.
• Before you can share client service data, you have to define data interchange formats and be comfortable that you are sharing the right data and not broadcasting social security numbers over the Internet.
• Before you can visualize data is a meaningful way, it needs to have a structure that makes sense for your business.
• Before you can make REAL sense of multi-colored spreadsheets you need to understand how to use data to further your mission through continuous measurement and improvement.
• Before you can interpret, you need to understand and describe your business process.

The Cloud reality starts with four steps. None of which is simple, painless, or even particularly unique to the cloud.

1. What business process(es) generate the social impact that is my mission?
2. What data is critical to those business processes?
3. What metrics measure the performance of those business processes?
4. How can I use data analysis to improve the impact of those business processes?

Unfortunately, the Cloud reality is that you've got to tackle these four points or the mythical benefits of the cloud may be forever out of reach.

A cloud provider like NetSuite has a bunch of "best practice" business processes, data and metrics ready for you "out-of-the-box." However, your average charity isn't going to find them comprehensive, recognizable or even necessarily in line with their specific business processes. Social enterprises have it easier because they operate similar to our regular customer base.

One of our grantees just struggled with the challenge of managing pledges in NetSuite. Do you book the commitment in the general ledger (GL) or is a pledge a "liar's promise" that doesn't hit the GL until the check is in hand? As it turns out, NetSuite's canned business processes were exactly what they needed, but because it was labeled a "Sales Order" in the interface instead of a "Pledge" and a "Cash Sale" instead of a "Pledge Payment", they faced a situation where they thought the Cloud wasn't delivering for them.

We have another grantee that needed to allocate indirect costs to grants based on aggregate employee time sheet data. By knitting together a set of canned business processes and sprinkling in a few customizations, they were able to code their business process into NetSuite.

In each case, because the grantee had unique data, metric and analysis needs, they used a customization of NetSuite to achieve their precise business requirements.

Remember Holly's vision of data exchange, visualization and REAL sense? Yea, the customization route pretty much increases the price tag on achieving that by a factor of 10.

Ultimately, the cloud reality is that we are in the early stages. Sure the magic will come, but today start with baby steps.

1. Start simple. Get your contacts in a central database. Enter you financials in a central system. Keep the financial data (donations) connected with the CRM data (donors).
2. Collect critical data. Add a couple fields to the database so you get the critical information about your contacts.
3. Put together a dashboard. Pick a single metric important to you business (Revenue is alway good) and manage to it. 
4. Grow from there. Take additional steps like forecasting your expected donation and grant income.

As you progress, you'll start getting glimpses of the magic to come. In a coming post we'll tackle the questions of starting with small steps or doing a big bang as you move your organization to the cloud.

Charities in the Cloud: Hype vs. Reality

Ami Dar, the founder and executive director of Idealist.org, described Idealist's cloud based organization in his keynote at the Nonprofit Technology Enterprise Network (NTEN) online conference. Joanne Fritz provides a good overview.

The benefits of the cloud for charities struggling with IT spending are pretty compelling, but need to be taken with a grain of salt and a bit of nuance.

But honestly, a deep analysis is not necessary to make the Cloud choice. On premise software is dead. For a whole raft of reasons, Software as a Service (SaaS, aka the "Cloud") is how applications will be delivered in the future. The analysis is to make the Cloud choice and have it be successful for your organization.

The primary nuance when talking of the cloud is whether you are talking about traditional "desktop" or "enterprise" applications. Desktop applications automate a task like writing a letter. Google Docs is equivalent of Microsoft Word on the desktop and very good at writing letters. Enterprise applications automate a business process such as acknowledging a gift-- you first record the gift, then send the donor a thank you letter, and then flag the record for an ask latter. Something like NetSuite or Salesforce is an enterprise application designed to automate a business process.

Business Process is Hard

Most charities and social enterprises think of all software like Microsoft Word. Fire it up and start typing. I do, however, remember when nonprofit staff had to be trained how to fire it up and start typing. Enterprise applications aren't like that.

In the example of donor thank you letters, you might not send letters to donors that give under $25 and send emails instead. But BEFORE you can effectively use an enterprise application, you need to understand, and write down, that process in all its details.

Now that you've written down you business process, you need to learn the software well enough to code your business process into the software. It makes learning how to use VLOOKUP in Excel an easy task.

Hype vs. Reality in the Enterprise Cloud

	The Marketing	The Reality
Cost	It's basically free!	Low up-front costs. This stems from the fact that if you have a web browser and internet connection, you don't have any servers to buy. The systems can be turned on (i.e. provisioned) in minutes and if you already know what you are doing, you can be productive in minutes. Subscription payment models. Sometimes you'll get a $0 subscription for services like Google Apps. The more sophisticated the software, the bigger the monthly subscription costs.  You still need a consultant. Sure you can get up and running with Google Docs without a consultant, but someone still needs to think through how the software will be used or three years latter you will not have access to the documents created by that summer intern. For more advanced applications like NetSuite, someone experienced with Accounting and ERP software implementations must be involved. SaaS company donations. The economics of  Software as a Service (SaaS) companies means that the barriers to donating services to charities and social enterprises are minimal-- we don't have to buy a bunch of servers for each new donation. This can radically lower the costs of software for a charity.
IT Staffing	No IT staff needed. Everyone is their own IT expert!	No one needs to reboot the servers. There is no server outages or upgrades. Just point your browser and it usually works. But know it will go down... just far less often than were it maintained by your old IT guy. More democratic administration. Role based security allows anyone in the organization to have the rights to create reports and share them with others, for example, without having to get permission from on high. At the same time, the cloud might be configured to be completely restrictive. People are needed for configuration and administration. You need someone who understands the software. And enterprise applications are just not that easy to learn. People are needed to extend. Who can look at your business process and tell you if your using the software in the best possible way? Who is going to tell you which feature the SaaS provider just released is going to save your staff time and effort?
Freedom	No wires! Work from home!	Anywhere, anytime access. If you have a web browser and an Internet connection, you any aspect of  your organization from financials to donor management to warehouse inventory.
Flexibility	It can open a can of beans and cook it for you to!	Platform as a Service (PaaS). Modern enterprise cloud providers have built systems that can be extended. You and write your own software and integrate it with the core business process from the SaaS provider. Don't think its easy or cheap, but it's easier and cheaper than the old on-premise way.
Reliability	We do it all for you!	Backup and recovery. The IT guys at a reputable SaaS vendor are far more likely to successfully back up and recover your data than your $30K/yr IT guy. It will go down. But FAR, FAR less than if you were trying to maintain an application yourself.
IT	The end of IT	Different IT. Users can take on more of the things that IT staff used to do, but the role of IT moves more from esoteric technical knowledge to knowledge about servers to the organization's goals and business process and how software helps or hinders achieving those goals.
Deployment	Do it yourself! Be productive in minutes!	Rapid deployment. For organizations that know their business process, the software can be turned on in minutes and you can begin coding your business process into the software. Reputable SaaS providers will have methodologies and materials to help with this process. Not so much DIY. Business process is complex. Unless you have experience configuring and deploying enterprise applications, just assume your going to need to hire a consultant or spend A LOT of time learning the software, making the rapid deployment benefit not so rapid.
Security	Sleep well at night!	Administration requires skills. Now that you have critical, sensitive organizational data in the Cloud, hopefully you have an administrator who understands how the role based security works. If your college intern set up your role-based security after assuring you it's "just like Facebook", then the intern login probably has permissions to access confidential personnel records and no one knows, including the intern that set up the permissions in the first place. Hackers are a non-issue. Your on-premise server maintained by an underpaid IT guy was FAR more vulnerable than the systems run by reputable SaaS vendors. SAS 70 is far more rigorous than your $30K/yr IT guy.
Green	Save the planet!	Save the planet! Compared to on-premise software, you're going to be using a lot less energy.

The Promise of the Cloud

Holly Ross, the Executive Director of NTEN, has a great quote: "In the cloud, we can share client service data with other organizations and map it against the need demonstrated by census data. In the cloud, we can create visualizations of our data that make those multi-colored spreadsheets finally make REAL sense."

In the cloud it is easier and cheaper to do these things. But it's certainly not free and it is not going to magically allow your summer intern to make it happen for you -- quality people with specialized skills make the magic happen.

Next time, I'll tackle defining some of the magic that skilled people can create with the cloud.

At NetSuite.org we are happy to support Ami's Argentine counterparts at Idealistas.org with financial and back office software in the cloud.