Robotics and Automation Society Business Plan Report

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Robotics and Automation SocietyBusiness
PlanReport
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Outline

• Background context
• Issues and business plan principles
• Business process
• Alternatives under consideration
• Some specific suggestions being considered

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Background Context
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Current RAS Business Divisions

• Four current business divisions
• Publications
• Conferences
• Administration
• Investments/Reserves

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Current Financial Flow
Income
Expenses
Publications Member Fees ASPP/IEL Non-member
Fees
Publications
Administrative Travel, Awards Tech. Comm, IEEE
Market Loss
Approved Initiatives
Surplus /Loss
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Recent Financial History
Stan. Dev. 1997Actuals 1998Actuals 1999Actuals 2000Actuals 2001Actuals 2002Actuals 2003 Actuals 2004Budget
 
Op Net 70.5 243.2 382.8 380.4 321.9 333.3 460.3 415.7 52.3
Market Chg 239.0 70.8 59.4 160.5 (14.7) (99.0) (382.8) 396.2 0.0
IEEE Tax (235.8) (631.7)  
Adjustments (4.1) (39.1) 59.3 (10.1) (34.1) (216.7) 174.3  
Net Surplus 473.1 309.9 403.1 600.2 61.3 (431.5) (139.2) 986.2  
 
Reserves 786.9 1,190.0 1,790.2 1,851.5 1,420.0 1,280.8 2,267.0  
 
Watch List Exp 930.9 1,049.6 1,110.3 1,125.6 2,005.0 1,545.2 1,199.2 1,811.4
All numbers in thousands
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IEEE TAB Rules

• Operating Fund/Watch List rule
• Negative operations in 2 consecutive years gt
  Watch List
• Reserves Watch List rule
• Reserve/Expenses lt 0.5 of operating budget in any
  2 consecutive years gt Watch List
• Reserves can only be budgeted for initiatives in
  accordance with TAB rules
• Cannot be budgeted for operations
• IEEE TAB must approve society budgets

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Secondary IEEE Factors

• New ASPP/IEL formula will cost RAS 100k per
  year unless we can force more Xplore usage or
  more articles
• IEEE recommends non-member rates and has
  penalized rates below recommended
• IEEE recommends that member rates cover variable
  publication costs
• IEEE Administration costs have been highly
  variable

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Financial Controls

• Direct controls
• Member fees (only 110k out of 2.2 mil.)
• Non-member subscription rates (170k)
• Member subscription rate (22k)
• Page charge rate (38k)
• Advertising rates (27K)
• Conference budget approval direction

Numbers are 2003 actuals
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Financial Controls

• Direct controls
• Some expenses (travel, awards, distinguished
  lecturer, member activities, long range planning,
  technical activities) (60k)
• Page counts
• Editorial reimbursed expenses (105k)

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Financial Controls

• Indirect controls
• ASPP/IEL (400k)
• Depends on number of Xplore hits and articles
• Book broker policy
• Which conference proceedings are included
• subscriptions subscription drive
• Form of subscriptions encourage change
• Electronic subscriptions avoid expense
• IEEE services used

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Current RAS Unbudgeted Expense Process

• Unbudgeted expense request brought to the
  Financial Activities Board prior to AdCom
• VP for Finance presents the financial impact on
  the budget to the AdCom
• The AdCom votes on funding the program

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Current Unbudgeted Expense Input Required

• Program title
• Name of the proposer (responsible for annual
  report)
• Starting and ending dates
• Amount requested
• Funds administered by (committee, etc.)
• Brief description
• Expected benefit to Society

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Recent Approved Initiatives

• T-ASE startup 300k
• Member Activities -- Virtual Communities 3k
• RAS Chapter of the Year Award 1k/yr
• RAS Technical Activities initiatives 10k
• Long Range Planning Committee initiative 5k
• IEEE Field Award 10k/yr
• Distinguished Service Awards 3k/yr
• EdCom initiatives 12k
• Distinguished Lecturers Program 9k/yr
• Archiving pre-1988 publications 35k  
• Note Recurring expenses must transition to
  operating budget

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Business Plan Issues

• Many categories of expense do not have directly
  related income streams
• IEEE changes having large impact
• Limited review of initiative proposals
• No review of initiatives after initial approval
• Criteria for setting subscription rates
• No planning for optimizing wrt IEEE rules
• How to utilize and control reserves
• Correlating activity to member desires

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Some Observations

• Standard deviation of operating net was 208k
• IEEE Tax part of operating budget since 2002
• Excluding effects of IEEE Tax, the operating
  surplus could be reduced without much danger of
  going on Watch List
• The largest market reduction in reserves was
  383k
• TAB reserve requirement 720k - 925k

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Business Principles
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Business Plan Principles

• There shall be a process to annually review
  business divisions and set operating and reserves
  goals
• Our reserves shall
• Be maintained at or above the TAB specified
  minimum plus a safety term
• Be the basis for establishing new initiatives
• Target limiting growth to planned levels
• Suggest TAB min 50 worst market loss
  initiative capacity

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Business Plan Principles

• Operating budget shall surplus shall be targeted
  to manage reserves
• While initiatives are encouraged when resources
  are available, strong proposals are expected.
• Reserves should not be spent simply because the
  excess reserves are substantial
• Consideration may be given to reducing member
  costs as well as to new initiatives

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Business Plan Principles

• Non-member income should support member services
• An initiative process shall consider
• One time vs. ongoing initiatives
• Regular review and sunset plan
• Income sources and budget impact
• Expenses (to members) of carrying out society
  business shall be reimbursed

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Business Plan Principles

• Members should not normally be paid for society
  activities
• Major business activities should be led by member
  volunteers but supported by professional
  services, either inside or outside the IEEE
• As a volunteer-run Society, consideration should
  continually be given to business simplification

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Business Process
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Annual Business Process

• Benefit/cost review of selected activities
• Divide new initiatives into two categories
• Fixed duration
• Secondary impact on budget, use reserve funds
• Ongoing expenses
• Possible initial reserve funding
• Assess long term operating budget impact
• Obtain LRPC input on desired annual initiative
  capacity
• Make initiative/activity decisions set rates
  budget surplus goal to achieve reserve level,
  while avoiding Watch List problems.

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Business Process
Anticipated External Factors
Activity Review
AdCom Review Decisions
Initiative Requests
FAB Financial Analysis
Initiative Capacity request
Financial Status
ExCom Review
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Some Alternativesand Specific Suggestions under
Consideration
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Possible Strategies

• Create three financial subunits with
  responsibility for income/expense in their units
• Publications
• Conferences
• Member Services, Administrative, Industrial
  Activities, Technical Activities
• Tax non-member income of financial subunits for
  activities without income stream
• Centralized control of budget (current scheme).
• Base initiatives on percentage of reserves, e.g.,
  5

FEEDBACK DESIRED!
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Business Plan Details

• Set the Reserve safety term half the worst case
  market loss
• Target an Initiative Capacity 5 - 10 of
  reserves
• Initially, our excess reserves are much larger
  than this
• A challenge to reduce them to this level
• Should we take occasional one year budget risks
  to limit reserves growth?
• Establish review period for each ongoing
  initiative when established

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Business Plan Details

• Our pricing structure should have non-members
  subsidize services for members
• Student and "other" (retired, out of work, life
  member, etc.) fees should be substantially below
  (e.g., 50 of) regular member fees
• Except as noted, service costs should be borne,
  to a reasonable extent, by those benefiting

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Specific Recommendations

• Member publication subscription rates variable
  cost
• Non-member subscription rate gt 2/3 market value
• Consider reducing ICRA IROS conference fees
• FAB should initialize the review intervals for
  existing activities
• There should be FAB representatives on PAB and
  CAB to help with financial analysis
• All conferences should have a net positive budget

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Specific Recommendations

• PAB and FAB should review co-sponsored pubs
  finances
• FAB and LRPC should establish a joint
  sub-committee to develop plans to address IEEE
  changes
• Determine what publications really cost per page
• Establish a web site initiative
• Move toward all electronic publications