15 January 2002

 

 

 

NATIONAL CAPITAL FREENET INCORPORATED

 

2002

STRATEGY AND OPERATIONAL PLAN

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepared for:

Board Of Directors

National Capital FreeNet Incorporated

402 Dunton Tower, Carleton University

1125 Colonel By Drive

Ottawa, Ontario  K1S 5B6

 

Prepared by:

Ian MacEachern

Executive Director

National Capital FreeNet Incorporated

402 Dunton Tower, Carleton University

1125 Colonel By Drive

Ottawa, Ontario  K1S 5B6

 


 

TABLE OF CONTENTS

 

1  EXECUTIVE SUMMARY 1

2  INTRODUCTION          2

3  ENVIRONMENTAL SUMMARY 3

4  MISSION STATEMENT                  3

5  2002 STRATEGY 4

6  2002 OPERATIONAL PLAN 6

7  2002 KEY INDICATORS OF SUCCESS  7

8  LONG TERM STRATEGY                   10

9  CONCLUSION             11

 


1 EXECUTIVE SUMMARY

 

The National Capital FreeNet (NCF) 2002 Strategy and Operational Plan is intended to provide strategic direction and guidance for the operational decisions that will be made over the next 12 months.

 

The first step in developing a strategy is to understand the operating environment, both internal and external to the organization.  Internally the NCF possesses strengths such as goodwill built up over almost 10 years of providing services to the community.  Contrary to those strengths are number of noticeable weaknesses such as poor reliability, caused by older technological infrastructure.  Externally, there are opportunities that the NCF can take advantage of, such as momentum generated by recent press coverage.  And as with the internal environment, there are conflicting threats such as the affordability of high-speed internet access.

 

The next step is to understand the vision and mission of the organization.  The NCF Mission is as follows:

 

The National Capital FreeNet / Libertel de la Capitale nationale is a free, computer-based information sharing network accessible in both official languages of Canada.  It links the people and organizations of this region, provides useful information, and enables an open exchange of ideas with the world. Community involvement makes FreeNet an important and accessible meeting place, and prepares people for full participation in a rapidly changing communications environment.

 

The strategy that flows from the environmental analysis and the organizational mission has three components: the goals, products and services, and the basis of competition of the organization. The following is a list of goals for the NCF in 2002:

 

  1. Remain donation based.
  2. Improve the reliability of the services offered to our members
  3. Extend the range of services offered to our members
  4. Raise the visibility of the NCF within the community
  5. Increase the relevance of the NCF
  6. Build useful partnerships
  7. Make better use of our members, supporters and volunteers
  8. Improve our operational efficiency
  9. Develop a long-term plan

 

Strategic goals must always direct the way the organization sets day-to-day priorities and makes operational decisions. Linked to each goal are a number of operational objectives, targets, tasks and accountabilities.  The 2002 targets set ambitious, but realistic milestones for progress by the end of 2002.

 

Progress against two key indicators will ultimately determine the level of success of the 2002 Strategy and Operational Plan.  There are two key indicators for 2002:

 

1.        Active membership numbers: Success indicated by an active membership of 8008 by the end of 2002

2.        Donation revenue: Success indicated by donation revenue from members and organizations totaling $179,399 for 2002.

 

Finally, it is imperative that the NCF develop a long-term plan if it is to become self-sustaining.  A number of goals and operational objectives for the medium and long-term are presented to initiate discussion and to act as a starting point for the development of the long-term plan.


 

2 INTRODUCTION

As we near the end of 2001, the National Capital FreeNet (NCF) faces serious challenges and significant opportunities. This document will present a strategy and operational plan for 2002 that will allow the organization to overcome the challenges and take advantage of the opportunities.

 

In order for the reader to better understand this document, I would like to present a brief description of each of the major sections.

 

The first section will summarize the internal and external operating environment.  This is necessary in order to understand the constraints under which the NCF is operating.

 

Next follows the NCF Mission Statement, the basis for all activities undertaken by the (NCF).  It highlights the core “raison d’etre” of the organization. 

 

Flowing from the mission statement is the strategic plan.  Currently strategic plans target only the current fiscal year.  The strategic plan provides the direction for the upcoming year and shapes the way the NCF sets day-to-day priorities and makes operational decisions. It includes the organizational goals, lists what products and services will be offered, and indicates how the organization will compete.

 

The link between the strategy and the day-to-day operational decisions is the operational plan.  It links the goals outlined in the strategic plan with operational objectives and time frames in which to accomplish the objectives.

 

Plans require methods of evaluation to determine their success.  Key indicators of success are presented that will ultimately provide a measuring stick of the success of the strategy.

 

Finally, as a way to initiate discussion on the long-term sustainability of the NCF, a number of medium and long-term goals and operational objectives are presented.

 

As the Executive Director of the NCF, it is my pleasure to present this document to the Board of Directors.  It is my sincere belief that the strategy and operational plans presented herein will provide a framework with which to build a foundation for the long-term success of the NCF.

 

Ian MacEachern

Executive Director

National Capital FreeNet

January 1, 2002


 

3 ENVIRONMENTAL SUMMARY

 

An analysis of the NCF strategic environment can be summarized under four headings: strengths, weaknesses, opportunities and threats.  Strengths and weaknesses are considered to be internal to the organization; opportunities and threats are external.

 

Strengths

 

Weaknesses

 

Opportunities

 

Threats

 

4 MISSION STATEMENT

 

The mission statement of the NCF is as follows:

 

The National Capital FreeNet / Libertel de la Capitale nationale is a free, computer-based information sharing network accessible in both official languages of Canada.  It links the people and organizations of this region, provides useful information, and enables an open exchange of ideas with the world. Community involvement makes FreeNet an important and accessible meeting place, and prepares people for full participation in a rapidly changing communications environment.

 


5 2002 STRATEGY

 

The 2002 Strategy is designed to build on the organization’s strengths, overcome its weaknesses, take advantage of the opportunities and prevail over the threats it faces.  Its guiding principle is to further the vision provided in the mission statement. 

 

All of the goals outlined in the 2002 Strategy are derived from four organizational priorities: to see the NCF survive through 2002; to build a foundation for long-term sustainability; to establish the NCF as a final destination for obtaining internet services instead of preparing people for full internet participation with “real ISP’s”; and, to initiate a change in the culture of the NCF, returning to the vibrant, relevant, and technologically current personality of the Neff’s early days. 

 

Accordingly, the following is a list of goals for the NCF in 2002:

 

  1. Remain donation based.
  2. Improve the reliability of the services offered to our members
  3. Extend the range of services offered to our members
  4. Raise the visibility of the NCF within the community
  5. Increase the relevance of the NCF
  6. Build useful partnerships
  7. Make better use of our members, supporters and volunteers
  8. Improve our operational efficiency
  9. Develop a long-term plan

 

Expanding each item in this list briefly and in general terms.

 

  1. Remain donation based

Support through member donations is a key part of NCF – it keeps NCF independent, and sponsors see it as a reason to support us.  It has proven effective in the past but we must continue to provide good reasons for people to donate.  NCF must be seen to be doing worthwhile things in the community, and providing members with value. 

  1. Improve the reliability of the services offered to our members

The technological infrastructure of the NCF is facing obsolescence.  14.4 and 28.8 kbps modems provide serious limitations to PPP users.  33.6 kbps modems are somewhat more modern but still significantly behind the times. Equipment to connect to analog phone lines is almost non-existent.  In the long term, a transition to digital access technology is a must. In the short term significant improvements in the reliability of the current service must be made.

Our servers are not in immediate need of upgrading but will require it if we want to provide newer more resource intensive services.  If we are to be able to handle success this part of the infrastructure must also be upgraded.  A new technical infrastructure map outlining our server requirements and current resources will start this process.

  1. Extend the range of services offered to our members

This process has already begun.  We are implementing the Thin Client service.  We hope to roll out the WebMail service and the Extended Access service early in the new year.  Web-based communication/collaboration tools and domain hosting are just two of many other internet services we can make available to our members, either by providing them ourselves or through collaboration with partners.  We should also be investigating, evaluating and offering access to new technological advances such as 802.11 networking


  1. Raise the visibility of the NCF within the community

Many people in the city either don’t know us or have erroneous or incomplete views of what the NCF is about. This has got to change.  The projects will help.  A coordinated and well-planned marketing campaign is essential. Reestablishing the NCF brand is paramount. And the web site needs a complete overhaul.

  1. Increase the relevance of the NCF

The time where the NCF could simply provide basic internet services is past.  We must give new members a compelling reason to join, and existing members a compelling reason to stay.  We must be able to effectively answer the question “Why should I join the NCF, and why should I stay?” 

The NCF is perceived as being old and outdated, both internally and externally.  Recent news articles have suggested that the NCF is irrelevant. Communications among the membership via means other than e-mail is limited to newsgroups and their usage has declined.  The NCF can act as a facilitator of discourse on issues that affect the community but needs to provide the means for citizens to communicate on-line first.     

6.        Build useful partnerships

This is a key to survival.  We don’t have the resources to go it alone.  We must convince potential partners that there is value in partnering with us. We have things to offer: a large user base, an extensive network of contacts at all levels of government, a strong core group of technically knowledgeable members and volunteers, etc.  What we need is to do is make use of partnership opportunities that will give us substantial benefits.  Partnership just for the sake of partnering does no good.

  1. Make better use of our members, supporters and volunteers

This goal goes hand-in-hand with the goal of building better partnerships. Critical to the success of the NCF is the ability to attract, utilize and retain high quality volunteers. The small staff and board of directors are not sufficient to perform all the activities required to survive and achieve long-term sustainability.  It is imperative that a volunteer management process be established to determine what activities need to be performed and to effectively allocate the volunteer resources.

8.        Improve our operational efficiency

In addition to establishing the NCF as a final destination for people needing internet services, we must make it easy for people to join, easy to donate, easy to stay a member. The current registration, donation, and membership maintenance system is in need of a significant upgrade if we are to be able to handle an increase in membership. Web enabling the system to allow the user to perform membership related tasks would dramatically increase efficiency.

  1. Develop a long-term plan

Although the immediate term priority is to survive, and correspondingly the goals listed here focus on the short term, to achieve long term success and sustainability requires a plan.  Accordingly, it is necessary to put in place a process for review of the vision and mission of the organization, with the intention of charting a course that will lead to the NCF becoming a model for other community networks, both in Canada and around the world.

 

The second component of the 2002 Strategy is the identification of which products and services the NCF will offer.  In 2002 the services offered will be:

 


The final component of the 2002 Strategy is identifying how the NCF intends to compete in the marketplace. The basis of competition for 2002 will be as follows:

 

 

6 2002 OPERATIONAL PLAN

 

The 2002 Operational Plan links the goals outlined in the 2002 Strategy with specific operational objectives, associated tasks, required resources, accountability, and performance targets.   Its primary focus is to provide a framework for achieving the strategic goals while providing a genuine sense of strategic direction and establishing priorities for the day-to-day operational management of the organization. It must be noted that in order to achieve the goals a premium must be placed on discharging ordinary management functions extraordinarily well, although these functions are not specifically described here.

 

1.        Goal: Remain donation based.

1.1.      Operational Objective: Achieve donations necessary to operate at break-even or at a surplus

Time Frame: Performance against budget measured Q1, Q2, Q3, Q4

2.        Goal: Improve the reliability of the services offered to our members

2.1.      Operational Objective: Solve dial-up access problems

Time Frame: Q1

2.2.      Operational Objective: Upgrade the technological infrastructure

Time Frame: Q4

3.        Goal: Extend the range of services offered to our members

3.1.      Operational Objective: Roll out Thin Client I (HRDC)

Time Frame: Q1

3.2.      Operational Objective: Roll out Thin Client II (IC)

Time Frame: Q2

3.3.      Operational Objective: Roll out Web Mail I (IC)

Time Frame: Q2

3.4.      Operational Objective: Roll out Extended Access II (IC)

Time Frame: Q1

3.5.      Operational Objective: Provide domain hosting services

Time Frame: Q3

4.        Goal: Raise the visibility of the NCF within the community

4.1.      Operational Objective: Develop and implement an effective marketing program

Time Frame: Q2

4.2.      Operational Objective: Revamp web site

Time Frame: Q2

5.        Goal: Increase the relevance of the NCF

5.1.      Operational Objective: Provide members the opportunity and means to become active participants in public debate of community issues i.e. discussions of the broadband initiative, etc.

Time Frame: Q3

5.2.      Operational Objective: Provide sponsorship and authentication service for 802.11community network

Time Frame: Q3

6.        Goal: Build useful partnerships

6.1.      Operational Objective: Establish significant partnerships with community foundations, local corporations, individuals capable of providing significant donations

Time Frame: Progress measured Q1, Q2, Q3, Q4

7.        Goal: Make better use of our members, supporters and volunteers

7.1.      Operational Objective: Establish volunteer management process

Time Frame: Progress measured Q1, Q2, Q3, Q4

8.        Goal: Improve our operational efficiency

8.1.      Operational Objective: Port membership database to RDBMS

Time Frame: Q2

8.2.      Operational Objective: Start porting member service functionality to web-based system

Time Frame: Q4

8.3.      Operational Objective: Improve member support services

Time Frame: Progress measured Q1, Q2, Q3, Q4

9.        Goal: Develop a long-term plan

9.1.      Operational Objective: Establish a long-term strategic plan for the organization

Time Frame: Q4
 

 

7 2002 KEY INDICATORS OF SUCCESS

 

 

There are two key indicators that will determine the success of the strategy:

1.        Active membership numbers: Success indicated by an active membership of 8008 by the end of 2002.

2.        Donation revenue: Success indicated by donation revenue from members and organizations totaling $179,399 for 2002.

 

Quarterly Summary of Key Indicators

 

 

Q1

Q2

Q3

Q4

Total

New Members

554

645

788

878

2865

Renewing Members

1501

1592

852

691

4643

New Donations

7,410

8,610

10,530

11,730

$38,280

Renewing Donations

42,206

44,661

24,495

20,157

$131,519

 

Member Renewal Forecast Model

 

The basis for the forecasted renewing members is the model developed by Jim Elder (aa456).  The model starts with the number of active members in the membership database.  It then segregates the members according to how long they have been members of the NCF and by the month of their renewal date.  For brevity we will call these figures “members by age by renewal month (MARM)”.  Next the model uses past registration and renewal data to determine the probability of renewal for each age and renewal month, and then averages the monthly figures into a probability of renewal for a given age (pAge).  Multiplying the two (MARM, pAge) gives the number of renewing members likely to renew for a given age and month of renewal (RMARM). 

 

Next the model takes the average donation for the current year and divides it by the average donation for the previous year (in this case, the previous year being 2000, the current year being 2001).  This gives a scaling factor, essentially predicting the rate of increase or decrease in average donations based on past trends.  The model then multiplies the average donation for the previous year for each age by the scaling factor to give the predicted average donation for each age (PDA).

 

An analysis of the current year’s renewal numbers is then used to develop a probability of a renewing member donating (pDon)  

 

Multiplying the number of renewing members likely to renew for a given age and month of renewal (RMARM) by the probability of a renewing member donating (pDon) by the predicted average donation for each age (PDA) gives the monthly renewal donation dollar figure. The model then lags the monthly renewal donation figure by three weeks to account for the actual date of donation as compared to the renewal date.

 

Development of 2002 renewal numbers

 

Renewing Members

 

Currently, there are 6,734 active members. The model uses the numbers for probability of renewing by age of member (pAge), as shown in column 2 below. These numbers are based on historical data.  To develop the target for numbers of renewals I have used the probabilities in the third column.

 

Age of member

Current probability of renewal

Revised probability of renewal

1

30%

50%

2

60%

67%

3

64%

71%

4

68%

75%

5

68%

75%

6

72%

79%

7

75%

82%

8

76%

83%

 

My plan to achieve the higher numbers of renewals call for an increase in the percentage of members renewing of 7% for members who have been with NCF for 2 years or more.  I believe this can be accomplished by increasing the reliability of the dial-up access, upgrading the technical infrastructure, and by successfully rolling out the new projects (Thin Client, Web Mail).

 

The most challenging part of the plan will be to increase the probability of renewal for members who have been with the NCF for only 1 year from 30% to 50%.  In order to accomplish this we will count on the planned initiatives to retain members who have been with the organization longer than 1 year as mentioned above, plus specifically target newer members in a modified renewal letter, and also by conducting a campaign that will attempt to have somebody in the organization contact them either by e-mail or phone to ensure they know why they have to renew, the benefits of the NCF, and to listen to concerns or complaints they may have.

 

The number of renewing members using the higher probability of renewal is given in the summary table below.

 

New Members

 

The forecasted numbers for new members have been 98 per month for the last two years.  For new members, we have consistently achieved an average of 132 per month in the last 24 months.  This has been accomplished without the benefit of a sustained marketing effort.  I feel that we can achieve an average of 135 new members per month, as a base new member figure, with monthly variations based on historical patterns noted over the last two years. These numbers are expected to be achieved before taking into account the rollout of the new projects and the implementation of a marketing campaign.

 

We will be rolling out the new Thin Client project in February.  I do not see an immediate benefit of this in attracting new members, but with the initiation of the promotional campaign tied to the project rollout, I forecast the number of new members joining the NCF primarily because of this initiative will start at 25 in April and peak at 125 in the months of September and October.

 

Likewise, we plan on rolling out the new Web Mail project in April, with the resulting new members tied to this initiative averaging 30 per month starting in September.  The lower number here results from the fact there is much more competition in this area from well-established competitors such as hotmail and Yahoo.

 

Other initiatives such as providing members the opportunity and means to become active participants in public debate of community issues, providing sponsorship and authentication service for an 802.11community network, and establishing significant partnerships with community foundations, local corporations, service clubs and other non-profit organizations, will also increase the number of new members.  I expect these initiatives to attract an average of 50 members per month starting in March.

 

Finally, there are a substantial number of members whose status is in a state of flux. They are not new, nor have they renewed, but they are still in an active state. Currently that number totals around 500. 

 

The following table summarizes the forecast membership numbers for the year 2002.

 

 

Jan

Feb

Mar

Apr

May

Jun

July

Aug

Sept

Oct

Nov

Dec

Total

Renewals

446

544

511

551

524

517

309

263

280

257

205

239

4643

Base New

177

169

158

119

135

116

106

136

141

136

130

97

1620

Thin Client New

 

 

 

25

50

50

50

50

125

125

75

75

625

Web Mail New

 

 

 

 

 

 

 

 

30

30

30

30

120

Other Initiatives New

 

 

50

50

50

50

50

50

50

50

50

50

500

Total New

177

169

208

194

235

216

206

236

346

341

285

252

2865

Flux

 

 

 

 

 

 

 

 

 

 

 

 

500

Total Members

 Dec 31 2002

 

 

 

 

 

 

 

 

 

 

 

 

8008

 

Donations from members and organizations

 

Ultimately the long-term sustainability of the NCF hinges on donations, particularly from members but also from organizations.  

 

For renewing members, past experience indicates that we can expect 58% to donate, with an average donation in the past year being  $48.56. I expect these figures to remain constant in 2002.

 

For new members, past experience indicates that we can expect 45% to donate, with an average donation in the past year being  $29.71. The target donation rate is expected to remain constant, while the average donation will increase slightly to $30.00.

 

For organizations, donations in the past year averaged $800 per month and this is expected to continue in 2002.

 


The following table summarizes the target donations from new and renewing members and organizations.

 

 

Jan

Feb

Mar

Apr

May

Jun

July

Aug

Sept

Oct

Nov

Dec

Total

Renewals

446

544

511

551

524

517

309

263

280

257

205

239

4643

Donating

259

315

296

319

304

300

179

152

162

149

119

138

2693

Renewing Donations

$12,531

15,304

14,371

15,441

14,651

14,569

8,816

7,566

8,113

7,443

5,909

6,805

$131,519

Total New

177

169

208

194

235

216

206

236

346

341

285

252

2865

Donating

79

75

93

86

105

96

92

105

154

152

127

112

1276

New Donations

$2,370

2,250

2,790

2,580

3,150

2,880

2,760

3,150

4,620

4,560

3,810

3,360

$38,280

Organization Donations

$800

800

800

800

800

800

800

800

800

800

800

800

$9,600

Total

 

 

 

 

 

 

 

 

 

 

 

 

$179,399

 

8 LONG TERM STRATEGY

 

An important part of the strategic planning for any organization is to establish a long-term vision and accompanying goals.  This section will outline goals that should drive the planning process for 2003 and beyond.

 

Medium Term (2003-2004)

Goals

·         Continue to build the NCF brand

·         Convince more and more potential partners that there is value in partnering with us – start having them approach us

·         Continue to upgrade technologically

 

Operational objectives 
·         Execute francophone membership drive     

 


Long term (2005 - 2007)

Goals

·         Become a model for freenets/community networks around the world

·         Become self sustaining

·         Become a proactive, learning organization

·         Increased corporate/organizational funding – we want organizations to want to come to us with funding for community projects, not have to search them out and beg for money

·         High visibility in the community

·         Increased Francophone membership

 

Operational Objectives

 

9 CONCLUSION

 

The purpose of this document is to provide a framework for guiding the day-to-day management of the National Capital FreeNet.  In order to accomplish this purpose, I have presented: a summary of the current operating environment; the NCF mission statement; a proposed strategy including specific goals for 2002; key indicators of success; an operational plan for implementing the strategy; and, finally, an initial list of long-term goals and objectives.  It is my sincere belief the strategy and operational plan will provide the NCF with the direction necessary to effectively manage the organization and develop a foundation for it long-term sustainability.