Preparing for NDIS – Top Tips

The National Disability Insurance Scheme (NDIS) is the new way of providing individualised support for eligible people with permanent and significant disability, their families and carers. It will deliver a national system of disability support focused on the individual needs and choices of people with disability (Australian Government – Department of Social Services). The introduction of NDIS is causing significant disruption for some disability service providers, as funding shifts from bulk funding in advance to person-centred funding. The roll-outs across Australia are continuing and the reality of a new way of providing services is dawning on many Not-for-profit organisations (NFPs).

Some of the many challenges NFPs may face include increased competition particularly for the most profitable services, uncertainty of cash flow, accounting for multiple services under the same delivery package and unexpected requirements in service delivery. At the heart of these challenges is the struggle for future sustainability.

Below are five pointers to help your organisation begin or continue preparation for NDIS.

1. Funding, Sustainability and Revenue Security / Diversification

Person-centred funding, if not managed well, could undermine the financial viability of disability providers. Heavily government funded NFPs should be planning strategies and tactics to diversify revenue.

Some strategies which disability providers can use to achieve sustainability include:

  • Organisation wide drive towards innovation
  • Increased M&A activity
  • New fundraising and volunteer approaches
  • Commercial partnerships with NFPs and for profit organisations
  • Development of social enterprises

2. Business / Service Model Configuration 

Disability service providers must recognise that under NDIS, business and service provision will need to be undertaken differently.  In many instances a restructure may be necessary to reposition organisations to become more client focused and commercially sound.

Changing business and service model configurations will also require fresh thinking around workforce planning and the need to have as many variable costs as possible. The ability to scale up and down quickly is fundamental in achieving sustainability. This means that disability organisations should consider HR and workforce strategies to compliment the new business model.

Alongside this is the impact on culture of the organisation.  It may require working with the front line delivery teams to ensure they understand the need for change of service requirements without impacting on delivery of the overall mission of your NFP.

3. Cost of service and unit costing

Understanding costs and determining the price for services will be vital to managing organisational viability.  NFPs must understand their cost of service and how to price existing and potentially new services under NDIS. Unit costing should encompass the full cost of service delivery which is critical as service providers could only be reimbursed for services they deliver in accordance with support packages under NDIS.   A robust understanding of these concepts can also be used to optimise the mix of your organisation’s service offering – informing strategic decisions.

Understanding cost can also open the opportunity to partner with other organisations that have best practice cost and quality delivery where your organisation does not.

4. Value proposition, differentiation and go to market strategies

Traditionally, NFPs haven’t needed to define and ‘market’ their value proposition and points of differentiation. However, now that clients have the choice of where and with whom they spend their funding, standing out in a crowded market is particularly important.

5. Investment in organisation support areas (IT & Finance)

Spending outside the mission makes many NFPs uncomfortable. Historically administration, processes and systems haven’t received the funding they have required to enable the organisation to run as efficiently and effectively as possible. To remain sustainable under NDIS, however, organisations will need streamlined back office support, and this can often mean a need to spend outside of the mission. Investment in areas such as IT and Finance – enabled by robust systems and processes – can help drive these efficiencies.