Business Transformation: UW Foundation’s IT overhaul reveals best practices

Mike Knetter, president and CEO of the UW-Madison Foundation, acknowledges that higher education, with the exception of computer science departments of a few select institutions, is not exactly driving the information technology revolution. But he’s been pleasantly surprised by the willingness of his staff to take on the kinds of technology and business process changes that he and CIO Kari Myrland are asking them to make.

Knetter, the former dean of the UW-Madison School of Business, knows firsthand how difficult it is to change the business processes of large public universities. When Knetter went from the UW Business School, where he took IT for granted, to the foundation in 2010, he found an old Lotus Notes platform that had been set up in the early 1980s. Yet when you consider how far the foundation’s employees have come since then, he’s increasingly confident they will embrace new business systems that “go live” starting in August.

That doesn’t happen by accident. There is a significant amount of communication, staff training, and testing that must occur to make such a transformation possible, but when Knetter first arrived at the foundation, he realized that a significant degree of change management was in the offing. The UW-Madison Foundation, the fundraising and investment gift arm of the university, exists to deliver private gift support to serve the university’s highest priorities. When Knetter made it clear that he wanted regular email communications with the donor base, in particular the Bascom Hill Society, he was greeted with an awkward silence.

UW Foundation CIO Kari Myrland, here talking to Kyle Buchmann, managing senior director of development, has brought needed experience in IT project work to the organization.

“It turns out that wasn’t possible because sending an email to 4,000 addresses would take down the system,” Knetter recalled. “And I said, ‘Well, how are we communicating with these people?’ I guess they would occasionally get letters and invitations in the mail, but that was it.”

Thinking back, Knetter finds it remarkable that the UW Foundation staff, which itself has undergone transition and change since his arrival, was able to fulfill its mission with an IT-supported sales function that he characterized as unplanned versus planned, reactive (not proactive), tactical (not strategic), and unmonitored versus measured. Yet the organization was able to point to data that suggested it was still doing better than its peers.

The foundation has three functions: investment, business development (fundraising), and information. Knetter wanted to capture information, establish a different level of metrics, and measure and monitor data so the organization could be strategic and set goals, but convincing his workforce there was an even better way would take some doing. “To a lot of the people who were now my partners, we were already approaching this in a more effective way than others,” he recalled.

The business case

Another complicating factor is the foundation’s relationship to the university. Neither the foundation nor the UW’s other important affiliate organizations — University Research Park, the Wisconsin Alumni Research Foundation, and the Wisconsin Alumni Association — are actually part of the university. The reason for that is the university is a state agency; as such, it cannot ensure the privacy of its information, which is subject to open records law. In contrast, the foundation’s development work gathers information about donors, including their personal situations, and that should be kept confidential.

In addition, the foundation must secure the assets of donors and ensure that they are only distributed to university accounts when they are ready to be used for donor intent. This is also important because once funds are at the university, they are technically property of the state. “In a financial crisis, any funds at the university are property of the state, and they can be redirected as needed in that sort of situation, and we would not want that to happen to donor funds,” Knetter explained. “It’s very important to donors that if there is a gift, and if there is a gift agreement, it can be honored.”

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The downside is that it’s “a headwind for fundraising that we’re not part of the university because a lot of the key people on the ‘sales team’ are part of the university, such as the chancellor, and the deans, and many of the people who manage these relationships,” Knetter said. “So our employees are the fundraisers who manage the information and craft the plans. They have hard lines up to us, but they are assigned, typically, to work on behalf of a school or college unit, or some other unit of campus that has a development opportunity, and so the need for coordination with campus leaders is very important.”

The past 10 to 15 years have brought a cataclysmic shift in funding of major public universities because state funds have become much harder to come by. The skewing of societal income distribution means this has been a pretty good time for philanthropy, even with the financial crisis of 2008-09. Tuition has enjoyed significant growth over this period because the value of a college degree in the labor force has increased tremendously, but Wisconsin institutions of higher learning cannot raise tuition too high because the UW Regents and the Legislature don’t want tuition to consume too large a fraction of median income.

So in a tough climate for raising tuition and for state funding, the university turned to philanthropy. Thanks to what Knetter called “an uncommon degree of loyalty” among its alumni population, and recent Fed policy that boosted stock market performance, the university has done pretty well securing gifts, but he believes the foundation needs a modernized IT infrastructure to support its efforts.

A leader for the team

CIO Kari Myrland joined the foundation’s IT transformation while it was already in progress, and was with the foundation for only 2½ months when Knetter turned to her to lead it. She had just come from a project-rich culture at Promega Corp. and was already participating with various functional teams on the project when she took command of IT, so a trust had already been established in those first couple of months.

Since taking the baton, she’s been leading an IT initiative that includes implementing a higher education-specific CRM and its related marketing modules, implementing a new financial system, building a data warehouse from the ground up, building several supporting applications, and installing several third-party applications.

One of the goals is to modernize the entire IT infrastructure so the business development staff can take advantage of modern technologies. Another end goal is to lay the groundwork for more predictive business analytics, so Myrland works closely with Jim Kennedy, the foundation’s new director of marketing, and with Alisa Roberston, chief development officer, to plan for how the organization wants to use information in the future.

Communicating project information is done through regular posts on the foundation’s intranet, periodic staff emails, regular staff meetings, and specific orientation at individual business team meetings. In those orientation sessions, staffers can get answers to specific questions about their business functional area, get sneak previews or insights into how some of the new system functionality looks and behaves, and provide their feedback on what the foundation has built so far.

“It’s been kind of multithreaded,” Myrland noted. “We have somebody that has been overseeing communication broadly, so everything that goes out goes through her lens. We have a very choreographed, planned approach to that.”

Yet the communication plan is never really done, she added. It rides alongside the overall project plan, with appropriate communications at key milestones. “It continues to evolve every day, so as we learn new things or we get feedback, we can adjust. There is a framework in place and the people are in place, but it’s not a static plan.”

Pace of adoption

As with any new system implementation, there are varying degrees of willingness to accept the change ahead, but Myrland is pleased by how the UWF staff is participating. The adoption curve will look very similar to any other business, but by structuring the project timeline with training and pre-launch testing that involves as many users as possible, people already see the benefits.

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Business development leadership has been able to show its teams how the system is going to work for them, to the point of giving them assignments to prepare for the August “go-live.” They have begun to build their prospect plans, clean up their data, and engage in testing so that they won’t “skip too many beats” when the new systems are ready. “They are starting to see the functionality of the system and see the advantages that it’s bringing in,” Myrland said. “They are really embracing that because they are hands-on.”

Myrland notes the go-live period is not an end, it’s a beginning, and there will be a “many-month” period of stabilization as users adjust to their new ways of working. Beyond stabilization, the foundation will start to realize the benefits of the new system and begin the process of optimizing around it.

The CIO skill set

Knetter believes a successful CIO must have more than technical competence. He or she must have leadership and communication skills, and he credits Myrland with bringing a discipline and thoughtfulness about project work that the foundation did not previously have in its organizational DNA.

“It’s really a certain leadership and confidence that you need to project, so you can build teams and lead teams,” he said. “That’s really important, and then they must have unstintingly honest communication with all the stakeholders in the organization, including the CEO.”

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