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Serving Non-Profits: A Case Study
Real-World Adoption Strategies
September 14, 2006
Laying beneath the shaded streets of Canton, Georgia is the office of RDA Systems. It is an unassuming and unpretentious office, which echoes the personality of its current president, Dave Davis. A second-generation president of the company, Davis is quietly spoken, yet knows what it is to take open source software into the competitive world of the non-profit organization. RDA Systems is not a large company as companies go. It is a family-owned and operated business that is so typical of American business. Small, lean, and somewhat successful.
For RDA Systems, going open source was a strategic decision. Since the early 1980s the company had provided accounting software to public schools and municipalities. About 75% of their current customer base is schools in the K-12 range. Their product fits the non-for-profit market sector.
What drove the change? According to Davis, "we wanted to be different." Going open source was the solution to make them different to their competitors. He also wanted a competitive approach to help give him an edge in a highly competitive market. The competitive edge he was after, however, was not price. It was service and customer relationships.
Davis was interested in the relationship that he develops with his customers. And he figured that open source provided a better opportunity to build lasting and meaningful relationships than was possible if the company remained where it was. Now this does not imply that a company cannot provide good service if it is not in the open source marketplace. But what is does indicate is that when you are in open source, the perhaps the only way to make it is on service, and plenty of it.
However, Davis also understood the business drivers that buyers need to make intelligent decisions. He had the advantage, of course, of an established product in the market place. He also had the advantage of a solid and loyal customer base. Why, then, rock the boat?
A part of the answer to this question is the world view held by Davis. He thinks long term. He is more interested in a long term relationship with his customers than he is in making quick sales and losing customers on the way.
By making the shift to open source, RDA Systems could immediately change the dynamic of their relationship with new and existing customers. By giving away the software, RDA systems was now obliged to deliver superior service in order to attract and keep business.
For Davis, this is the key to success in the open source environment. Since you cannot make your money selling software, you better make it on service, otherwise there's no business.
Business decisions don't happen without some problems. In fact, a good rule to adopt is determining which set of problems you want to have. RDA Systems gave up short term profits and put a strain on their limited resources. What it gained, however, was improved profitability in the longer term.
Davis brings to this business a religious zeal to impact lives. He sees the business as a ministry to deliver quality service and products. By making the shift to open source, he placed everyone in his company on notice that now customer service was the critical component.
Yes, the company still continues to make sales and look for new customers. But these new customers only provide a payback for the their efforts way down the track--in the case of RDA Systems, they look in the 5-7 year range for an acceptable return on investment. Without servicing existing accounts well, RDA does not have the resources to continue to develop new relationships.
RDA Systems is thus a good example of how a company can move to the open source environment and do it successfully. Davis attributes the following steps to their successful changeover to open source.
First, he says, "take existing systems and make them better." There is no great advantage in reinventing the wheel when the current wheel has capacity for so many improvements. The schools and colleges on his software did not need a brand new approach to accounting software. What they needed was software that better addressed the needs of these organizations.
Second, Open Source provided RDA Systems with the ability to reduce initial costs for their customers. While they often met resistance from technical people who were familiar with NT and understood how to keep it working but unfamiliar with Linux, RDA Systems has successfully transitioned their customers to become lower maintenance site now operating with Linux.
Third, open source made it easy to provide some additional valuable add-ons to their software. Open Office, mail, calendar and contacts database are all items that users find valuable. In this case, RDA Systems was able to ride on the backs of others who have developed open source applications.
In summary, RDA Systems applied a simple formula and were successful in doing so. They took the advantage of open source, transferred their existing software to the environment, and applied the combination for a successful change in the way they do business.
The question needs to be asked: Can other businesses succeed in the open source marketplace? The answer is obvious if RDA Systems is a guide. open source certainly has it challenges. It does not provide a solution to all business problems. But it has some great solutions to real business issues.
If you have an open source solution, then follow Davis' advice. Find a problem, solve that problem, and see what rewards satisfied customers will send in your direction.