The importance of having systems in place that can communicate critical information quickly is only growing as organizations become increasingly data-driven. However, many companies are struggling with bloated tech stacks — wasting $18 million on average just on unused software-as-a-service licenses.

Revitalizing one’s technology stack can provide crucial cost benefits for organizations — for example, putting a centralized, single platform in place allowed Michael Kennedy, CFO and chief operating officer of the Muscular Dystrophy Association, to quickly adjust the nonprofit’s expenses during the onset of the COVID-19 pandemic, he said during an interview.

The shutdown had a massive impact on the national nonprofit, hampering its ability to hold events, camps and to provide care. Founded in 1950, the organization is focused on supporting individuals living with muscular dystrophy or related neuromuscular diseases by funding research, care centers, clinical trials and other initiatives, according to its website.

Due to a technology revamp Kennedy undertook upon joining MDA in 2018, however, the organization was able to quickly adjust, so that although it lost about $60 million in expected fundraising revenue, MDA only lost $16 million in 2020, he said. The company’s gross revenue budget before the pandemic hit was $117.3 million, the company said via email, while actual gross revenue for the year reached $57.1 million.

“You knew you [were] going to lose something,” he said.” But if we lost $60 million, that would have crushed...at the time [a] 71-year old organization, and that I couldn't allow. So we were in survival mode, but we had the tools to do it.”

Dismantling the tech stack  

A long-time financial executive, Kennedy learned the importance of having an end-to-end connected system through his experiences at large, complex organizations such as Mastercard and American Express, where he held various CFO and financial roles, according to his LinkedIn profile.

When he joined the Chicago, Illinois-based MDA in 2018, his main goal was to overhaul the nonprofit’s back-end technology and platforms — which had become both antiquated and costly to maintain.

“When I first got here, the first thing I asked for is, what is the technology infrastructure, what does it look like?” Kennedy said. “And there were 65 systems, none of them talking to each other.”

Kennedy has a framed chart of what he was first handed that displays the 65 systems, which he pared down to one over the course of several years. MDA now operates virtually on Salesforce, having launched its single, cloud-based platform on Jan. 1, 2019, with all of its fundraising and general ledger tools connected.

As well as allowing MDA to weather the COVID-19 pandemic, the technology refresh has enabled MDA to save nearly $5 million in costs since 2018, Kennedy said.

That single platform allowed MDA to centralize previously siloed processes, consolidating everything from donations to sponsorships into one place so “you now have captured the complete profile of what you're trying to do,” he said. “That information year after year after year is very powerful.”

Operations and AI

As it reduced expenses, the technology overhaul also enabled MDA to funnel a larger percentage of its funding to the services it provides. For its fiscal 2022, MDA spent nearly 66% of its expenses on its programs, compared to 52% for the prior fiscal year, according to data collected by Charity Navigator.

As CFO, Kennedy is focused on the next phase of innovation, he said. Last year, MDA appointed him as chief operating officer as well as its top finance chief, a move that reflects a growing trend for financial leaders.

“The talents of CFOs now have to spread between operations, technology, strategy, and revenue,” he said. With the addition of the COO title, Kennedy is “now able to provide a completely different level of support to the leadership team, which then passes down throughout the organization,” he said.

That next phase of innovation involves examining how technologies like AI could come into play for fundraising and other aspects of the nonprofit’s operations. The organization is working with Salesforce to see how AI could be incorporated, Kennedy said, highlighting the importance of data clarity and centralization in applying such tools.

“Everyone wants to do AI, but if you don't have information, there's nothing to sort through,” he said. “And AI is not there to make the decision for you,” but to provide information rapidly and cost-effectively so that leaders can make informed decisions, he said.