So I’m looking at Blackbaud’s 2/28 EDGAR filing… That’s what I do when I’m up due to jetlag.
Did you know that Blackbaud’s services revenue as a percentage of Blackbaud’s total revenue has stayed pretty much the same over the last three years? Yet, consulting services now represent 60% of that revenue line item? Here’s what consulting services are:
“Consulting, installation and implementation services involve converting data from a customer’s existing system, assistance in file set up and system configuration, and/or process re-engineering.”
So this is what is happening:
A nonprofit uses a direct mail vendor or has an internal direct mail system. However, they now want to switch to Blackbaud. Blackbaud comes in and all they have to work with is a crappy .csv file or in my org’s case, fixed width which is even worse. Blackbaud now has to assign a DBA to the nonprofit and a business analyst to go in and parse what that .csv file is and how the data is supposed to go into Blackbaud. How long will this take? Who knows? However, I know that for my org it cost tens of thousands of dollars. Basically, that’s the pay to play fee. This is what happens when you don’t use open APIs in our sector. You end up paying for more and more services.
Is this Blackbaud’s fault? No. It’s ours. We’re the ones who insist on systems that are closed without looking at other vendors or demanding an open API as a feature set. And by continuing to stay with Blackbaud, we continue this pattern of sticking with proprietary systems. Blackbaud made $61.2 million (roughly the operating income of six medium size homelessness organizations in New York City) off of our sector in 2006 because we had crappy proprietary systems and they’ll continue to make even more money because we switched to them. And if we switch off of Blackbaud, that’s more money to the next vendor. Unfortunately, those of us with Blackbaud will now have to pay thousands of dollars to convert. And no one I know has ever done a Raiser’s Edge to salesforce.com conversion. If YOU know of someone who did, please have them comment below. I’d love to know how it went.
Folks, we can’t continue as a sector giving tens of millions of dollars to our vendors like this. And ultimately, this is the one of the reasons that Blackbaud finds it difficult to move to an open API. They’re assuming that an open API would lower the cost of conversion so that people could more easily move out of the Blackbaud family and into their other competitors like salesforce.com or SugarCRM. Their business model is predicated on the conversion of other people’s closed systems to their closed system. That one line alone has gone from $42.8 million in 2004 to it’s current $61.2 million figure. Why should Blackbaud implement an open API when it’s so clear that as a sector we haven’t done our homework and continue to stay on the proprietary systems merry go round?
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I have an online meeting with salesforce.com later today about converting from RE. We’ll see how it goes…
Take a look at Shaun Sullivan’s newest posting on Blogbaud.com around API.
http://www.blogbaud.com/2007/02/21/open-source-api-samples-project/
I know about that posting and it was in the back of my mind while I was writing about the EDGAR filing. While I understand Shaun Sullivan’s motivation in giving something out as a kind of quick hack, I wouldn’t consider that post to be a serious change in habit for Blackbaud.
I completely agree with you and unfortunately, I work for one of those companies. We are most likely going to convert to RE and I know that all of the integration problems that we currently have are going to come with us. Or we will pay Professional Services tons of money to get everything integrated. And then next year when we change our business practices we’ll pay them more money to change it all.
I’ve tried promoting a look at salesforce, but because salesforce doesn’t have a product that we can just “plug” into that does everything our fundraising staff needs, no one wants to look at it. Perhaps someone can give me some more arguments, but the feeling is that we would have to hire full-time developers to make salesforce work the way we need it to. And if we don’t hire someone as an FTE, we would be stuck with a consultant and that is just like working with Professional Services. So why pay someone to invent the wheel when Blackbaud already has?
From what I see, no one is using salesforce as their one-and-only fundraising database across all departments. Therefore I have a feeling the inevitable is going to happen. I can’t wait till we try to integrate with our online system.
OK, here are some reasons. It sounds like you might have multiple offices. Salesforce.com is much better in a distributed environment than RE is. RE requires a Terminal Server in order to get close to being distributed and that means all users must have access to a Remote Desktop Connection on their desktop to use it. RDP itself needs to be upgraded and enhanced in order to render it safe and secure. If it’s not properly architected, it’s can be hit by a man in the middle attack.
Salesforce.com can integrate with your telephony in the coolest way imaginable. You can create a kickass call center with this. Go to http://www.nonprofittechblog.org/papilia-and-chipin-now-bffs#comment-5947 so you can see how salesforce.com suggests this.
It’s free for up to 10 users but I’ve heard (not confirmed) that it can be upgraded to even more users if you can prove you’re using your
licenses.
But wait — there’s more! You can make your CRM interact seamlessly with your CMS. In other words, real-time fundraising interaction with your CMS. No crazy imports via Netsolutions. You’ll save a lot of time with that.
And yes, you’ll NEED to customize salesforce to your needs. Sure, you’ll need to hire a consultant. However, there’s a clear limit to what you’ll be able to accomplish withing a strict RE deployment. Can you build a case management system within RE? Nope. Could you even get the two to talk to one another? Nope. RE sees itself as merely a fundraising tool. Salesforce.com is a enterprise-level initiative to finally once and for all remove all the barriers between data silos in ALL your departments.
But wait — there’s more. Salesforce.com will ALSO integrate with a document management system. Do you realize what this means? Nonprofits can now do sophisticated receipt handling for ALL donations. You can provide your donors with a level of service unheard of in the industry. We’re talking self-service on your main web site. A donor goes up to it, logs in, sees all their previous donations, and clicks for their receipts. The receipts and images of their previous checks will be held in your document management system. No muss, no fuss. Try THAT with Raiser’s Edge.
What this tells me is that your IT department really needs to understand how limited and closed their options are going to be in the next couple of years because of an RE purchase. As much as I want to see Blackbaud do it all, their Infinity product is still too early and definitely not hosted.
You simply don’t get the built-in disaster recovery of a salesforce.com solution.
And lastly, I bet someone can make a case that salesforce.com, because of its architecture, is actually better for the environment than Blackbaud’s Raiser’s Edge product. I think this case can be made because each RE deployment requires its own separate infrastructure (server, rack, storage and cooling). Salesforce.com is run on a much more efficient datacenter solution where they probably try to drive down resource usage because allocation is across an entire server farm. Economies of scale probably dictate that salesforce.com has a lower carbon footprint than Raiser’s Edge. That’s only my guess but I wouldn’t be surprised if it was true.
It’s interesting – I looked at Shaun’s post, and this comment jumped out at me: “No, Plugins do not use VBA functionality at all. Blackbaud licenses the embedded VBA programming from Microsoft for a fairly hefty fee, hence the reason we charge for it.”
I don’t know whether $ to BB = $ to MS (I’d bet it’s not that simple), but it’s interesting to note that if you are on a MS platform, that makes creating open (free, documented) APIs that much harder. So it’s a closed system built on top of a closed system.
Very true — it’s a very sad predicament for us. Yet, in a limited defense of Blackbaud’s situation, I doubt it’s very enjoyable for them to actually have to do these conversions. It’s ugly money that we’re paying and that they’re receiving.
I have read the comments and I cannot help but think that you are over simplifying what you see as a completely closed system supplied by Blackbaud.
I am an independent software developer and technical fundraising consultant. I specialize in developing customizations with The Raiser’s Edge and I do some system conversions from or to The Raiser’s Edge.
I am able to develop customizations, plug-ins and integrations with Raisers Edge just because is not a closed system. I use the API to develop plug-ins that integrate with other third party software. To name but a few: a legacy package, accounting software, web applications.
Sure unless you own the VBA module you cannot use it but that does not stop you from integrating with other software or developing your own customization (for free).
As for the conversion that you resented paying Blackbaud to do… I do not know the details but the consultants who do work on your system have no more tools than you or I do. They may have more knowledge but this information is available for general consumption (that’s how I learnt). I am guessing that with a bit of perseverance you could have done the conversion yourself. There are also a many other non-Blackbaud consultants or people who work with The Raiser’s Edge out there who could have advised.
It is very easy to blame Blackbaud for their lack of an open system but it is also very easy to be fooled into thinking that Blackbaud has to do everything and that you are unable to things yourself because of their “closed system”. This simply is not true.
David
David Zeidman
Zeidman Development
http://www.zeidman.info
I definitely admit that the problem is NOT Blackbaud’s. It’s fairly clear that I stated that. It’s ours as a sector. It’s clear that Blackbaud is chosen without an eye to SOA or any kind of real interoperability. For whatever reason, nonprofit management in 2006 and going ahead is not seeing the inherent problems behind a Blackbaud deployment. How is it that nonprofit management set up a core line of business application (which is what RE is) that doesn’t talk to anyone? There’s not a particularly large ecosystem of developers or third party vendors around Blackbaud. Why is that, David? You know the answers all too well.
The friction involved with proprietary systems (data conversion, lack of interoperability, no established canonical business process) is what’s killing us here. We COULD do it ourselves but let’s not kid ourselves. I run a $500,000 budget by myself, five consultants and an intern. Can you tell me where I would have time to do this? LOL. So… it’s acknowledged that we’d have to hire consultants in order to do the most important work. I resent that simply because the technology and the process behind it has become a hindrance and not a help to nonprofits. There’s now an associated cost with any kind of integration — something that other CRMs don’t make you have to pay. My post was not intended to slight the work that you or other Blackbaud consultants do — clearly, you are there to help grease the wheels as it were. However, it is my hope that by constantly pointing out the downstream deployment costs of Raiser’s Edge that we, as a sector, put some heat on Blackbaud to accelerate 3rd party integration efforts such as yours with an open API.
And when I mean open, I don’t mean paying for the VBA module (can you care to discuss how much that VBA module is?) and the cost of set-up for a .NET application development environment. I mean something where we can use other programming languages to access Raiser’s Edge itself. I also mean more than a half-hearted attempt by Blackbaud to post code samples without documentation.
As for my org’s data conversion — no, it was ugly. Our third party mailing list vendor was horrible. Dupes, typos, deletions that were not carried out abounded throughout the database and this was due to lack of care on our part in managing the vendor. All that happened before I got here so it’s easy to slag but my suspicions are that those issues are typical for many, if not most, nonprofits. As I said, this isn’t Blackbaud’s fault. We purchased a proprietary system in the first place and didn’t take care of it. We then moved to yet another proprietary system (Blackbaud) and paid the conversion costs. However, that was in 2003 and it’s arguable we didn’t have a choice. It’s clear now though that with the advent of SugarCRM, Compass.NET and Salesforce that there ARE alternatives out there now.
As always though, I’m glad to hear from you. You haven’t been around in a while. Glad to see you still read the blog!
I was reading through the blog and I hate to interject with my own personal needs, but I am looking for a third party vendor that can write a customization for the FINANCIAL EDGE… There are some validation features I want to employ as part of our daily processing.
BB isn’t sharing an ISV list with me so easily.
Thanks!
I would suggest that you look at zeidman.info.
Thank you Allan. lbrewster please feel free to contact me via my site at http://www.zeidman.info/contact.htm. We specialize in such customizations for Blackbaud products.
David Zeidman
Hi Allan, has anyone taken you up on your offer to report a RE/BBEC conversion to Force.com? I like Force.com not necessarily as a replacement, but as a tool to look across it and the many systems in which we have constituent information.
Whew, an RE to Force.com conversion? Myself and Peter Gulka over at blackbus.org are both still looking for this mythical software beast. Someday, this will happen but so far no takers. This is Blackbaud’s great bulwark against the future. The minute someone learns to do a RE to Force.com conversion and learns to productize that, please have them tell me so I can look into shorting Blackbaud stock
I think Force.com is great but I have some reservations about Salesforce in general that pertains to the fact that your code has to somewhat conform to Salesforce.com business logic in order for it to interoperate with third-party Apps in AppExchange. From what I can tell, Force.com doesn’t change that because these fundamental constructs are what the Apps expect. This means you cannot really store data in custom objects simply because the Apps don’t expect it. This isn’t a huge issue if you never expect your app to work with third-party Apps but it’s like hacking your own arm off to put on a one-sleeved sweater. Sure, it fits now but perhaps this wasn’t what you intended!
I used to work for Blackbaud (Conversions Manager) and left about 8 years ago. Since leaving Blackbaud, I have worked with a number of non-profits either converting from or to The Raiser’s Edge, mostly as a volunteer. It doesn’t have to be expensive or painful. I can help with conversion or data integration with other systems.
Help! Can anyone out there recommend or help me find qualified BBEC consultants? I realise it is a fairly new product for BB, but our organisation is going later this year and we are looking to fill some technical gaps.
Good afternoon, Norman. Is it possible to chat? Our non-profit is going LIVE on BBEC in the coming months and but we are in need of some technical assistance from someone who understands BB methodology etc. Let me know if I can contact you and how to do that. Kindly, T