by John M. Covaleski

Charleston, S.C. - When Robert Sywolski took over as chief executive of nonprofit industry software vendor Blackbaud in mid-2000, he pledged to keep the company in a leadership position, but acknowledged, "how we do that may be tricky."

Two years later, he has crystallized his vision for the $100 million-a-year company. "Everyone wants to understand how effective they are in dealing with their constituents and in operating their businesses, so it’s all about knowledge management as we move forward," he said.

Knowledge management is more typically associated with billion-dollar Fortune 1000 companies and high-end consulting, so it’s natural that Sywolski would be attuned to it. Before joining Blackbaud, he was chairman and chief executive of the North American operations of Cap Gemini SA, the international consulting powerhouse that acquired the consulting operations of Ernst & Young in 2000.

Sywolski believes that Blackbaud is stepping forward with knowledge management on the product development front with its latest release, the Financial Edge accounting system. The product, rolled out in February, has financial management and reporting functions not found in Blackbaud’s former flagship accounting solution, Accounting for NonProfits.

Those advanced functions include built-in reporting capability, advanced transaction tracking, "what if" analysis capabilities and enhanced integration with Raiser’s Edge, another Blackbaud offering that is widely regarded as the market’s most robust fundraising management system on the market.

Raiser’s Edge and Financial Edge also both include added abilities to be customized for use for specific niches within the nonprofit segment.

Blackbaud has also been making creative use of the Internet. It has Web-enabled Raiser’s Edge and has launched several online initiatives to communicate with end users, prospects and industry consultants.

The company has also shown greater interest in communicating with its sales channel under Sywolski. In January, Blackbaud created an advisory board, comprised of its top resellers, to advise company management on channel concerns.

"Bob has shown himself to be very pro-channel," said Ed Roshitsh, Blackbaud’s sales and marketing vice president. The channel ranks have increased to 27 organizations, from 16, since Sywolski joined Blackbaud.

This was a particularly big gain in light of Blackbaud’s past channel history. After selling direct since its inception in 1991, it launched a channel strategy for its accounting product in mid-1998, adding the 16 resellers by 2000.

The vendor has three rankings of resellers: a Silver level of local resellers, typically CPAs, who are interested in selling software to drive their consulting work; a Gold level of larger local resellers who also want to stimulate consulting sales; and a Platinum level of large, regional organizations.

For smaller resellers, who may be lacking some technology skills, Blackbaud has an internal service channel of highly skilled technologists on call for assistance when needed. "The reseller becomes the project manager, and we become their subcontractor, when the reseller lacks ability to handle certain engagement aspects on their own," Roshitsh said.

Although Blackbaud has significantly expanded its channel in the past two years, it may still be perceived as a direct seller because the company handles virtually all the sales of Raiser’s Edge, while leaving most of the accounting product sales to resellers.

However, Roshitsh said that Blackbaud plans to make Raiser’s Edge available for sale by the channel. "It’s not a question of Ôif’, it a question of Ôwhen’," he said.

He said that feedback from the reseller advisory board was among the factors that helped the company realize that it’s important to move Raiser’s Edge to the channel, particularly to resellers with expertise in integration and customer relationship management.

He also expects the greater functionality in Financial Edge to particularly help larger resellers. "The higher-end resellers are not interested in just selling; they want to offer software and integration services that provide additional value, and Financial Edge is very complete in what it provides in that area," he said.

Among Blackbaud’s newest, large resellers is Cole Systems Associates, of New York, a well-established reseller of systems by commercial market vendors Microsoft/Great Plains and Best Software. "Financial Edge, is built on a strong architecture and will provide our clients and prospects with even greater functionality and flexibility," said Cole chief executive Joe Lewis

The integration with Raiser’s Edge allows Financial Edge users to, among other things, verify to donors that their gifts were used for their intended purposes, and immediately respond to requests for supporting detail on transactions.

"The ability to turn data into management knowledge has been an underlying theme in Financial Edge’s development," said Sywolski. It’s also been a theme in other recent product development.

For example, last year, Blackbaud enhanced Raiser’s Edge by adding an electronic "dashboard," that gives users immediate access to the fundraising data most pertinent to their work roles. And it added Internet functions, including the ability to conduct fundraising and manage volunteer workers online.

Blackbaud is among several in the nonprofit industry that expect the market to make greater use of the Internet and other advanced technologies in the wake of terrorism’s new threat to traditional donation and support patterns.

"The days of technology planning being left to the techie in the windowless office are over," Sywolski said in an October 2001 feature in Accounting Today about terrorism’s impact on nonprofits. "Nonprofits pushing to remain competitive and survive will embrace technology as a leadership issue."

Blackbaud is advocating nonprofits’ migrations to the Internet. In addition to the online capabilities in Raiser’s Edge, the vendor has also introduced three Web magazines that are designed expressly for nonprofits and resellers and consultants serving that community.

There are two separate e-newsletters found as links on its www.blackbaud.com Web site, which report on trends in nonprofit financial management and on trends in fundraising; and a Jobs at Nonprofits Career Site, www.jobsatnonprofits.com, where nonprofits can share news of job openings.

The company also has reached out to the nonprofit community in non-electronic fashion by hosting a Symposium on Philanthropy in San Francisco in late April, which attracted some 300 industry executives.

At the meeting, Sywolski publicly praised his company’s new technologies, but warned that they, alone, are not the ultimate solution.

"Without a strategic vision, and the leadership and staff needed to convert the vision to reality, technology will consistently and predictably fail to live up to its potential," Sywolski said.

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