How MDA uses FinancialForce to capture the 'moment of truth' that drives results

Phil Wainewright Profile picture for user pwainewright July 22, 2022 Audio mode
Summary:
Getting a real-time view of data across the organization with FinancialForce and Salesforce has helped MDA save $14 million in annual running costs to support its mission.

MDA summer camp sign on wooden fence with grass behind
(MDA)

In any job, it's always satisfying to know that your role is having an impact on how the organization performs. At a non-profit like the Muscular Dystrophy Association (MDA), there's the extra satisfaction of knowing that your efforts are helping to change people's lives. After making savings of $14 million in annual running costs in the past three years, Mike Kennedy, Chief Financial Officer of MDA, knows that extra money has gone into research and care for people with muscular dystrophy and other neuromuscular conditions, including facilitating clinical trials that have led to FDA approval for new drugs for the condition. He says:

I spent a big part of my career making other organizations or individuals wealthy. It's nice to say I can definitely feel for the last four years, I've dedicated those same efforts to impact this mission, which is actually helping so many people...

It's not just about saving $x million. I hope my $x million helped approve one of those FDA drugs, because that's where it's at. I didn't move a share price. I didn't give somebody else a bigger bonus. Every dollar saved goes right down into helping all the people we serve.

Real-time business data

The four-year journey started with the implementation of FinancialForce as the non-profit organization's finance system, running alongside CRM apps from Salesforce, which also serves at the underlying technology platform for FinancialForce. Kennedy says:

Salesforce is more my operating system now, where my sales teams and my mission teams record everything they're doing, and then we see through dashboards are they progressing along? And then FinancialForce becomes the report card, general ledger, and a processing machine to do procurement and payables.

The purpose of bringing all the key information together in a single platform was to give much better visibility of real-time business data. Kennedy explains:

With the speed of change today, you can no longer tolerate front- and back-offices, you have to have a single flow. You just need to be able to trust your information, to be able to use your information, and then to be able to guide your future strategy ...

What FinancialForce has been able to do for us is, I'm capturing all that information, whether it's revenue coming in, or it's expenses going out the door, at the point that we're making that decision. I have 'moment of truth' information ... I'm looking at the facts right from ten minutes ago.

Immediate impact

This is a huge contrast from the past, when the organization had to rely on financial reporting that was a month out-of-date by the time it was ready, and didn't have the same granularity that's now possible. He continues:

When I first got here that didn't exist. It was like you were waiting for 30 days to be told what you did 30 days ago, and you had no read on what was the likelihood that anything was going to improve.

Now I know what appointments are being made. I know what sponsors are connected. I know what stream they are in the stages of getting a sponsor — we have seven stages of cultivating a sponsor, and so depending on what stage they're in, I know exactly what the likelihood of that is going to mature this year, next year, or maybe not mature at all.

You truly start changing your fundraising team into a sales organization and you start driving your senior management to start connecting the strategy they wanted to the actual activities that are going on, and are they driving them? Many times you find out, 'Hey, wait a minute, there's something going on here that's not according to our strategy.' Before it becomes something bigger, when you don't have information, we've already said, 'Where are you going here? That's not our strategy. Let's bring the focus back.'

Some of the most immediate changes came from being able to see revenues and costs for each of, at the time, 93 regional offices. For the first time, it became possible to see that some offices were spending more than they were bringing in, and take actions to either improve fundraising or reduce costs. Kennedy also used the new system to centralize procurement for fundraising events, freeing up massive amounts of time each team had been spending on sourcing materials locally. Instead, teams use the cloud-based system to request what they need for the event, the central office orders the items from its preferred suppliers, and arranges delivery at the right time. This has also led to new contracts with suppliers to improve pricing or service levels.

Effecting changes like these requires persistence, says Kennedy. It's important to watch out for people trying to introduce workarounds to keep doing things the way they're used to doing them. Top-level backing for the new program is essential. He adds:

You need your CEO and you need your board to have the faith that when it gets tough, when the complaining starts, that they're not going to back off. Because it's not easy to make that change. People's routines are changing.

Change in three stages

He believes that successfully bringing in this kind of change to an organization is a three-stage, two-year process. For the first six months after the new system goes in, it's crucial to keep it on track and be alert for often subtle resistance from people trying to slide back to how they've done things in the past. Ultimately, some may not be willing to stay and be a part of it. Then comes the second stage, when everyone's accepted that the new system is here to stay but they're still building confidence in how it works. The final stage is when they start to take ownership of it. Kennedy says:

Until the benefits start coming in, until my finance team start seeing the time savings they're getting and the the authority they now have in the organization — suddenly their pride factor goes way up, because they're a go-to organization now for facts, where before they were the last place to go to because they didn't have any facts that were going to help the organization ...

You get into that 10, 11, 12 months of that second phase. Now they're starting to see the benefits. And the last six months, you've gained apostles in the whole process. They're recommending changes. That's where I get to pull back, to try to get them to own the process.

The FinancialForce implementation was completed in time to go live in January 2019, after a seven-month build process. By 2020, people were engaged and starting to take ownership. Then COVID hit. Kennedy says:

I put the system in not knowing COVID is around the corner. But if I didn't have it, we'd be out of business. We literally had 60% of our revenue go away overnight, we had to go virtual instantly. I'm sitting here with a cloud-based system, everybody's able to work from home. I know exactly where to adjust my expenses.

Operating virtually

It was a challenging time, but the organization was able to trim its losses and bounce back strongly in 2021. One key factor was that it gave an opportunity to review spending on office occupancy, which resulted in a savings of $8 million a year on office rentals. Many existing offices dated back to the days of telethons, when there was an office next to every TV station. Pre-COVID, staff felt very attached to those offices, and there was a lot of resistance to closing them. That has now changed. He says:

Now quite frankly, they don't want to go back — especially the employees with small families, It became very productive for them to be able to manage the at-home life, and schools that at a moment's notice, saying 'Your kids are going home right now, in the middle of the day.' You're home working, and it's not so disruptive, where if you're an hour or an hour-and-a-half away commuting, what are you going to do when you get that call?

With a cloud-based system, MDA is able to operate virtually, and will only need office space from time to time, for example when the finance team needs to get together and go over the monthly or quarterly figures. He comments:

You can't do this unless you have that backbone, where, when I let everybody go virtual, I'm able to still rely on the information that's coming. I don't have to peer over the cubicle to make sure the information is right. I can see it, my team can see it, we can evaluate it. That's the backbone of everything we've done, having that platform of information.

At the same time, standardizing processes in Salesforce has meant that sales and mission staff are able to use their time more productively. New relationships with suppliers have produced other savings, totaling around $3 million annually. This is not just about driving down prices, says Kennedy. He gives the example of a conversation with MDA's T-shirt supplier, which yielded the information that restricting logos to three spots on the shirt would have a major cost impact. Sponsors were perfectly happy with this level of choice, while having a standard template reduced production costs. He comments:

They actually came up with the idea of how to drop our price. Now I have a partner.

Seeing the drivers

Improvements to FinancialForce reporting are adding a final crucial element, along with the combination of Salesforce with Tableau. MDA has previously used a third party for reporting but having it all integrated as one system is more in tune with Kennedy's single platform philosophy. He explains:

That allows me to marry up the operational data with the financial data, so that we get the view of the organization. You see what we're doing, and you see its impact, and then the results. It's important from the executive level team to understand that these activities that those team members are in charge of, how it connects directly to our results.

If I just tell somebody revenues are up or down, quite frankly, it doesn't mean anything. Revenue is a math, it's this times this is revenue. You have to get down to the drivers. What did you do to make that revenue number move?

That's what these systems of the dashboards, and the Tableau and FinancialForce reporting do, it gets you to the drivers ... If I start seeing the drivers of what the dashboards are telling me, what the individuals are doing, and how that's building up into a pyramid of their activities, now we're looking at real stuff. Now we're looking at things we can question and guide. It makes a world of difference, plus it brings a level of transparency.

All of this advances MDA's work, which has invested more than $1 billion in research in its 70 years of existence, and is now accelerating efforts with a program to help target clinical trials, along with its long-established series of free summer camps for kids in its community along with other care, advocacy and education initiatives. Kennedy concludes:

Ten years ago, there were no FDA approved drugs. And now we have the sixteenth one was approved just recently, which is altering people's lives. Now you're seeing people who had a very short pre-teen lifespan, graduating from college, going into industries, being productive members of society, because of this billion-plus that we were able to get to research, and the tools we've built.

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