Technology Lessons from Wall Street for Nonprofits

Leo D'Angelo, CTO, Orange Leap Systems

Why Best-of-Breed is Better Than All-in-One

By Leo D’Angelo

CTO of Orange Leap Systems

About 15 years ago, I was working as a technologist for Fidelity Investments where I was asked to lead a project to build out their new equity trading floor. Needless to say it was a mammoth technological undertaking – involving software, hardware, and networking.

Most major investment bank trading floors up to this point in history had been all-in-one solutions that were provisioned by the same company who provided the software, hardware, etc… The process was usually excruciatingly painful, outrageously expensive, and enormously disruptive to the core business of the investment banks. Interestingly, the end-result was integrated but often lacked the specific features that brokers, managers, or executives needed to be more effective at their jobs.

Ned Johnson, Chairman and Founder of Fidelity Investments, recognized the problems with trading floors and asked us to build out a trading floor for Fidelity that would do the following things:

  • Cause no disruption to the daily business of money managers and investment brokers (meaning 0 percent downtime),
  • Meet 90 percent of the core business requirements of each department involved in the trading floor (not 90 percent of the total requirements, 90 percent of the requirements of each department), and,
  • Give Fidelity the flexibility to “own” our future by being able to “plug-and-play” solutions for specific needs in a modular fashion in any area (and especially in as-yet-unforeseen areas of the investment banking business).

At first I thought his direction was going to make my job very difficult because it almost certainly eliminated all of the existing single vendor solutions. However, by selecting a flexible foundation and utilizing the promise of object-oriented (plug and play) technologies. We where successful in integrating the best features/functionality of multiple vendors to provide a highly integrated, infinitely scaleable, world class best of breed trading platform.

As you can imagine, our project was a huge success and somewhat revolutionary in the investment banking world. Not only was it completed in less than 12 months for less money than any single quote we had received from the all-in-one vendors, but we also were able to deliver deep levels of functionality to each department, we were able to “own” our solution (as opposed to feeling held hostage by an all-in-one vendor) but still receive support from our vendors (in fact, I would argue our support was better than ever because of the depth of knowledge in specific areas). In the long-run, Fidelity has thrived with this “modular” model and in fact has probably added or replaced 30 percent of the total floor solution over the last 15 years to meet new and changing needs of the business without ever having to go through a “fork-lift” change or a single minute of down-time.

By now, I assume you are asking yourself how one of the world’s leading investment bank’s trading floor applies to the organizational and relationship challenges that you are trying to solve for your nonprofit organization. Well, I’ll tell you. Just like an investment bank (or most any business for that matter) you implement software and technology solutions because “time is money” and you need to automate business processes that make you more efficient, save you time, and/or make you more money. So you have systems that help you do those things – the three most likely areas where most nonprofit have (or at least should have) systems are accounting, constituent relationship management, and online tools.

It is vital to the continuity of your organization that those systems are integrated. In the multi-relationship and multi-channel world we live in, you have to manage donors, customers, volunteers, subscribers, listeners, attendees, and friends across direct mail, telephone, website, email, radio/TV, events, and personal contact. You can’t afford to have meaningful giving history about an important donor trapped in your online database where you can’t access it while you are sending an event invitation through the mail.

There are two kinds of integrated solutions; tightly coupled and loosely coupled. Tightly coupled tend to be the “all-in-one” solutions I referenced before. They are characterized by being built and owned by the same company, they have strong integration, and they are just like they sound “all-in-one” meaning “all-or-nothing”. They provide an integrated solution but they do not allow you pick and choose the pieces of the solution you like and to integrate them with other best of breed solutions. Which leads me to the second kind of integrated solution: loosely coupled.

Loosely coupled solutions can also be characterized as best-of-breed. This means that you can select the individual components that meet the specific needs of different areas of your organization and then integrate them to form a “best-of-breed” solution. In this scenario you must be careful to select solutions that have a history of integrating and use industry standard integration technologies.

Best-of-breed solutions are characterized by having deep functionality in each area of the organization, they are easier to replace in a modular fashion depending on the changing needs of the organization, they often cost less than an all-in-one solution, and they put control in the hands of the organization not the single vendor.

These were all keys to the success I had with the trading floor at Fidelity and they are reasons behind our decision at Orange Leap Systems to partner with Convio.

At Orange Leap Systems, we have an excellent CRM (constituent relationship management) solution that is very strong at multi-relationship and multi-channel communications, marketing, and fundraising. A couple of years ago we performed a thorough evaluation of whether or not we should build online tools to be part of our solution – specifically website content management, email marketing, and ecommerce functionality. After understanding the deep needs of nonprofit organizations in these different areas as well as getting a better understanding of how powerful the Convio online solution is – we quickly realized that it would be much wiser for us to partner with Convio to offer a best-of-breed solution than to try to replicate all that they do. A decision that has also helped us stay focused on building out our core CRM functionality.

Over the last 15 years I’ve learned a lot more about why loosely-coupled systems are preferable to tightly-coupled – much of it from my experience as CTO of eFax – a software as a service company working with over 9,000,0000 business and consumer customers. At e-Fax, we employed the same “modular” strategy that incorporated best-of-breed products in a loosely-coupled implementation that experienced all the same benefits discussed above. I came to learn that the reasons why those solutions worked so well for us and our partnerships were so strong with those companies were actually not all about the structure of their product offerings, but often times were as much about the structure of their companies and their corporate cultures. Whereas the all-in-one company’s tended to be closed and proprietary the companies that were best-of-breed tended to be open in their business practices and interested in solving problems in the easiest ways for their customers. They tended to offer more ways to develop around their products by giving us access to APIs, access to other customers, in some cases even access to their data model. They viewed the eOrange Leapment of us their customers as a way to help us because their business model was predicated upon solving the customer’s most pressing problems even if it didn’t mean direct revenue to them.

Now, I have been hearing a lot about “open” these days and I want to clarify something. While there are most definitely degrees of “open” (for instance, a door that is not closed may be open) but if it’s not completely open you can’t walk through it – which is the purpose of having an open door. From my experience either a company is “open” or they are not. They may say they have APIs, they may say they have an “open” strategy, but if they don’t exhibit the corporate philosophy that solving the customer problem is the highest and best need, their “open” is marketing, not truly open.

So, if you need to solve the same problems with technology that we solved at Fidelity and at eFax – namely:

  • Cause no disruption to the daily business,
  • Meet 90 percent of the core business requirements of each department, and,
  • Give your organization the flexibility to “own” your future by being able to “plug-and-play” solutions for specific needs in a modular fashion in any area.

Then take my advice and pursue a loosely-coupled strategy using best-of-breed solutions provided by companies who are committed to partner with you by providing you with truly open tools and solutions that are about meeting your needs.

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About the Author: Leo D’Angelo is CTO at Orange Leap Systems, which provides the most open, flexible and powerful constituent relationship management (CRM) software and services offering for nonprofits. To learn more about Orange Leap, please visit www.Orange Leapsystems.com.

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One Comment on “Technology Lessons from Wall Street for Nonprofits”

  1. Jim Cowen Says:

    I agree with your assessment between all-in-one and loosely coupled systems. While many vendors try to be all things to all situations, this stretches the vendor to thin and outside of their core competencies. By focusing on your core competency, CRM and fundraising, Orange Leap Systems has been able to grow and meet the needs of their clients by seeing how compatible systems fulfill everyone’s need: the client, Orange Leap Systems and the third-party solution provider.


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