Not for Profits

How NDIS is disrupting not-for-profit agencies and how to stay relevant

What is NDIS?

The National Disability Insurance Scheme (NDIS) is a marketplace style system where government funding will go straight to the client who can then choose which disability service provider they want to work with.

The scheme was trialled across 25,000 users. It has now moved to a full roll out across Australia and it is projected that the $22 billion NDIS scheme will be fully available to 450,000 Australians by July 2019.

How did NDIS come about?

Historically not-for-profit provider received government funding directly, while the states and territories had their own systems of funding and contracting for services. However, a 2011 Productivity Commission report found that their services were “underfunded, unfair, fragmented and inefficient.” Disability activists then pushed for change and the NDIS scheme was born, giving choice to the clients receiving services rather than the service provider.

What does it mean for you as a not-for-profit agency?

As a traditional disability service provider, you will lose your government contract and will have to compete to attract clients. From block funding to an NDIS ‘fee for service’ model, this is a totally new way of doing business which means your focus must shift from attracting government income and contracts to ensuring client, patient and carer satisfaction. Even the healthcare space globally is shifting from volume to value based healthcare which focuses on outcomes. You will need to rethink how you are delivering care and outcomes that matter to your clients and society as a whole to shape your strategy around this like never before. This may translate to money spent on marketing and administration, IT and other systems, and training of staff to provide services under this new arrangement, but with the empowered consumer now rating and reviewing both you and your competition on platforms such as Clickability.com.au, the value outcomes you deliver will be under growing scrutiny, and the competition will be fierce. 

Unfortunately, there is insufficient government funding to help your agency with this disruption. Some of you without the necessary capital may end up closing your doors, or be absorbed by larger organisations to survive. In the short term, the transition is certainly affecting a lot of people right now, in the same way as the IT industry and software vendors are being disrupted by the shift from on-premise to a cloud model.

Holding on to key and experienced staff will cause a bit of pain as you try to retain them. In a recent NDIS discussion forum I attended one service provide said, “We are trying to keep staff we can’t afford. They end up finding jobs with greater security… We will continue to assess if this is sustainable or close down accordingly”. In this particular case study, they downsized from 60 to about 25 employees. To minimise your monthly costs, some may look to ‘casualising’ their workforce, but this has its own pros and cons in regards to getting dedicated people who will stay loyal and committed to serving your customers.

So how can you as a disability service provider innovate your technology to compete and stay relevant?

Note: The following list aren’t meant to be a definitive guide, but are meant as a starting point to discuss with your board and key stakeholders.

On Marketing

Website – revisit your website. You may need to change your language, your content, research and make available new service lines, and general accessibility such as your contact forms to attract new customers. Consider digital marketing and running social media.

CRM – when you receive an enquiry from a prospective client, how are you currently managing that? You may need to consider putting in place a Customer Relationship Management (CRM) system, if you already do not have one, to ensure your staff can do things like schedule times and dates for follow up calls. Look for features that will help you to manage contacts, leads, pipeline opportunities, with nurture marketing campaign capabilities, and client or case management features.

Business consultant – with the NDIS, new kinds of competitors such as “for profit” organisations with successful business models will come into the arena. So consider seeking individuals who are experts in business strategy, sales and marketing, to help assess your traditional service model and create a new business plan that may help to differentiate your agency and grow.

Accounting

In this new model, you will need to better understand your costs and profit centres as getting paid and managing your clients will now become very important. Look for accounting software that not only has strong cash flow budget and forecasting features, but a solution that will give you insightful reporting that are capable of meeting not only your internal reporting requirements but also the complex reporting output needs of the government and your key stakeholders.

For example, Financials for Office 365 offer ‘dimensions’ or reporting tags which allow you to tag any transaction enabling you to report across your profit and cost centres. Dimensional tagging also means you can track sources of funding and donations. With multi-entity, intercompany posting and consolidation reporting capabilities, Financials for Office 365 offer ‘next level’ efficiency in your accounting and business reporting.

Cloud Solutions

Consider software that are cloud based which you pay-by-the-month. This moves your capital expenditure to an operational expense which can help with cash flow, and you won’t have to buy IT hardware ever again.

If data sovereignty, security and confidentiality is an issue, make sure you find a cloud provider who will host your data within Australian shores. For example, Financials for Office 365 is hosted in the Microsoft cloud in Sydney and in Melbourne and is the only cloud accounting software certified as a cloud panel supplier at the federal level in Australia, complete with IRAP security compliance.

Final thoughts

The NDIS scheme certainly has shaken up the sector in stimulating competition between the disability service providers to attract customers. However, it is also the disability user who faces new challenges associated with this implementation. Just imagine what it would be like to have too many options to choose from and which agency can provide you the level of service and care that you deserve. It’s early days but let’s hope the NDIS scheme will result in a system that meets the highest quality of service for all people with disabilities.

--- Joel Ramirez