Strategic Brief and Recommendations =================================== By Lisa Donnelly, Executive Director and Jeff Bossert, Treasurer Friday, 13 October 1995 Introduction: In support of the 1996 NCF budget preparation, the Finance committee has prepared an NCF "business plan" to clearly identify the NCF initiatives that are influencing the preparation of the budget and to recommend short-term spending. Please note that this is intended to be a discussion paper and is open to subsequent revision. The principal advantages of this approach are (i) it allows for an open discussion that is visible, and (ii) it allows us to document our decisions in an incremental manner as we work toward our goal of preparing next year's budget. We have separated the NCF initiatives into standard business (we recognize that the NCF is not a traditional business per se) functions to ensure that our analysis is complete and comprehensive. Contents: 1.0 Mission Statement 2.0 Recommendations for the last fiscal quarter of 1995 3.0 Finance 4.0 Operations 5.0 Development 6.0 Competition 1.0 Mission Statement ~~~~~~~~~~~~~~~~~~~~~ The National Capital FreeNet is a free, computer-based information sharing network. 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. 2.0 Recommendations for the last fiscal quarter of 1995 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ - Hire a full-time Junior System Administrator (40K all inclusive) and reduce Ian to half time so he can pursue a contract with the Montreal FreeNet benefit: for a $11,500 increase we get 50% more labour and maximize the use of expertise per funds spent - Hire a half-time Projects Coordinator (15K all inclusive) to manage volunteers and volunteer projects benefit: - NCF relies very heavily on volunteers and the focused management of 20+ volunteer groups would increase the productivity of staff and volunteer projects - Focused volunteer project management increases staff and volunteer morale Option: Trim quantity of volunteer projects and have all management of committees handled by the Board so current staff can manage the volunteer projects in a more direct manner - Purchase a quarter block of 16 lines, 16 14.4 modems and one terminal server - Install new equipment and begin software research and development asap - Begin looking into replacing 2400 baud modem pool (preferably by donation) - Addition of ethernet switch (donation from Plaintree Systems) to NCF computer network (includes adding 100 Mbps interface cards to 4 Sun computers) - Continue working on budget modeling in conjunction with Planning and Development committees to solidify the direction which best supports the NCF mission while promoting a self-sustaining business model. 3.0 Finance ~~~~~~~~~~~ 3.1 Conservative Planning ------------------------- - current NCF operations cost $7K/month more than revenue provided by membership donations, therefore grant and corporate sponsorship revenue is necessary for survival as is finding self-sustaining methods of raising operational revenue. - limited grant and corporate sponsorship revenue expected in the next 6 months. - expansion of numbers of telephone lines should be limited for the following reasons: -a 5 year lease commitment with Bell Canada is required for desirable rates -on-going/new telecommunications cost are a locked-in fixed cost for the corporation that adds risk -this type of access is expected to decline in the next few years. 4.0 Operations -------------- 4.1 Improved Access for Members ------------------------------- - addition of approx. 16 additional phone lines - replacement of 2400 bps modems with 14400 bps modems - addition of ethernet switch (donation from Plaintree Systems) to NCF computer network (includes adding 100 Mbps interface cards to 4 Sun computers) - consideration of ISDN-based access - consideration of expanded Internet access capacity (increase in INet fees) 4.2 Addition of Junior System Administrator ------------------------------------------- - would allow the focusing of specialized resources on tasks where they are best utilized, reduction of risk due to broader base of expertise - cost of junior system administrator estimated at $40K/yr. - would allow current System Administrator to pursue other contracts 4.3 Move Towards WWW Based Service ---------------------------------- - external environment is moving this way very rapidly - the NCF needs to move this way if it is to survive - some Information Providers have already left, favouring the use of free WWW homepage providers 4.4 Improved Efficiency and Effectiveness in Operations ------------------------------------------------------- - re-design of NCF volunteer organization - too many task forces/projects for Executive Director to effectively manage - consider reducing number of task forces/projects by 50% - consider hiring a part-time projects co-ordinator for $15K 4.5 Research and Development ---------------------------- - off-line mail readers - use of Solaris Operating system on Sparc computers - experimentation with WWW, Lynx implementations, etc 5.0 Development (Marketing) --------------------------- 5.1 Government Grants and Corporate Sponsorships ------------------------------------------------ - limited expectations at the present time 5.2 Personalized IDs -------------------- - feasibility analyzed - projected revenues of approx. $93K - Finance committee not confident of revenue projections 5.3 NCF Boutique ---------------- - operation of Boutique has not been profitable -currently carrying $18,000 in inventory that will have to be written off as a loss if not sold within 3 to 6 months (see below) - too many people allowed to sell merchandise with limited accountability or traceability. - existing inventory (Survival Guide) is becoming obsolete and has limited value Here are the facts from the Financials: Promotional Items Expenses for year to date (1995) $6,018 Expense related to Survival Guide = $4,863 Promotional Revenue for Year to Date (1995) $3,103 Resale value of current promotional items inventory $18,176 Regarding the Survival Guide and the Boutique, it is my understanding that all promotional items (things that NCF sells) are Boutique items and that is indeed reflected in the Director of Development contract. My current recommendation is that the Survival Guides be contracted to a firm that clears merchandise. Andre Ouellette is checking into this for us now. The distribution and collection of funds will be managed by such a firm. We will collect a lower profit margin but move our products prior to their becoming obsolete. Secondly, we should move all remaining promotional items into the NCF Administrative office where Jessica or the designated Boutique manager can conduct business and file the requested month end summary with the Administrative Coordinator. 5.0 Competition --------------- - Information Provider applications have decreased from approximately eight a month ( January 1995) to approximately 3 a month (July-Sept): a 62.5% decrease - some IPs are asking to have their NCF menus removed as they have, or are developing, web pages - increase in the amount of organizations that just want a web pointer - we are receiving request from non-profits to house their Web sites for a nominal fee - a non-profit organization that has approached us to house their Web site put a call out on the Internet requesting free space for a non-profit - The organization received 5 offers to host the organization for free and offers range from 5 to 10 megabytes for no charge. -- Lisa K. Donnelly, Executive Director * National Capital FreeNet/Libertel de la Capitale nationale * Telecommunities Canada, Board of Directors (613) 241-9554 voice & fax (613) 241-2477