Today, I attended the first meeting of the Nonprofit Forum on Information Systems.

The first speaker, Raz Hyperman (it’s an Israel name, go with me here), a senior member of the Israeli government’s Information and Communication Technology Division, shared a number of axioms related to Business Models that are applicable to both for-profits and nonprofits, alike:

  1. Understand the difference between your organization’s business model and it’s business strategy.  A business model is how a company operates and a business strategy is how it competes.  Every company and charity should have both.
  2. Business today has changed from the selling of products to the selling of services.  Not only does this change the way a product is sold, but it is also simplifying the experience for the customer by helping him better predict his costs.  Ex: Rolls-Royce, a maker of airplane engines, used to sell their engines and offer various service plans. Airlines would have to make a huge initial investment to buy the engine and then use complicated models to ascertain the best service plan. Now, Rolls-Royce no longer sells its engines and instead offers one monthly service package that covers everything.  A truly simpler and better customer experience.
  3. Instead of searching out expensive databases that match your (slightly) complicated billing structure, have you thought about simplifying your billing process to match a cheaper billing system?  Ex: Golan telecom in Israel ushered in flat, all-inclusive fee so they didn’t have to invest money (that they didn’t have) in adopting expensive billing software based on minutes and data usage.  Any and every customer pays the same, fixed price – no exceptions.  Technically, their billing system doesn’t need to be more complicated than an Excel sheet.

What of the above three applies to you?  Can you lower your overhead and appeal to your client’s needs at the same time?