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digitalNow
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SHARED SERVICES IN THE ASSOCIATION WORLD

• APRIL 21, 2006

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INTRODUCTION

• Tim Shank
• Managing Director Finance
• 8 years with PGA of America
• Rosemarie Barr
• Corporate Controller
• 12 years with PGA of America
• Brad Sullivan
• Director Section Affairs
• 12 years with PGA of America
• PGA Member

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AGENDA

• Overview shared services
• Review the PGAs shared services experience
• Demonstrate technology

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SHARED SERVICES
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SHARED SERVICES

• Shared services the centralized management of
  activities for multiple users
• What is different today than the classic
  centralize/decentralize strategy shifts of the
  80s and 90s?
• Technology
• Communications
• Outsourcing

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THE THREE PILLARS OF SHARED SERVICES

• Consolidation centrally managed service model
• Standardization the benefits of economy of
  scale can only be realized through
  standardization
• Automation key component is technology

• A.T.Kearney

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CENTRALIZED PROCESSES

• Payroll processing
• Billing and accounts receivable
• Accounts payable
• Customer support call centers
• Other repetitive processing functions (i.e.
  ADMINISTRATIVE STUFF)

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PGA OF AMERICA
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PROFESSIONAL GOLFERS ASSOCIATION OF AMERICA

• The PGA is a 501(c)(6) non-profit trade
  association
• The PGA was founded in 1916
• Todays membership is comprised of 28,000 men and
  women golf professionals
• National offices located in Palm Beach Gardens, FL

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GOVERNANCE MODEL

• The national association is governed by a 21
  member board
• 4 National Officers
• 14 District Directors
• 2 Independent Directors
• 1 PGA Tour Representative
• The national officers are elected by the
  delegates to the annual meeting
• Sections (chapters) have their own governance
  models

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ASSOCIATION

• Association issues include
• Volunteer leadership training
• Membership participation
• Member expectations
• Etc.
• Members are required to belong to both the
  national association and a local section
• There are 41 sections (chapters)

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41 SECTIONS / CHAPTERS
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EVOLUTION

• There have been three phases in the PGAs
  evolution to its current shared services
  structure
• Legacy services
• Centralized Database Management
• Formal shared services

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LEGACY SERVICES

• PGA actually centralized several functions more
  than 15 years ago
• The three main examples of historic
  centralization were
• National Marketing
• Dues Processing
• Risk Management
• Investment Management

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MARKETING

• National Association has entered into national
  licensing programs that benefit the sections
• Oldsmobile / Buick Scramble
• Pepsi
• Sponsorship of National PGA Professional
  Championships
• Titleist
• Club Car
• Buick
• PGA Tour

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DUES PROCESSING

• National Office processes section dues as well as
  national dues
• Dues collection includes
• Generate dues invoice
• Mailing dues invoice
• Collecting the dues via lockbox
• Remitting funds back to the Sections
• Fulfilling membership credentials
• Internet dues processing
• Downside

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RISK MANAGEMENT

• Centralized insurance program for the national
  office and all 41 sections
• Section program includes
• General liability
• Workers compensation
• Property and casualty
• Automobile
• Crime
• Fiduciary liability
• Directors and officers liability

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INVESTMENT MANAGEMET

• Sections had approximately 6 million dollars in
  liquid assets
• Pooled sections funds in order to obtain better
  investment returns
• Funds were invested to generate a return that
  exceeded the money market rates available on a
  stand alone basis by 20/40 basis points

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SECTION MANAGEMENT SYSTEM
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CENTRALIZED DATABASE

• In 1999, the PGA implemented its Section
  Management System usually referred to as SMS
• The Section Management System consisted of
• Centralized Membership Database
• Event Management System
• Tournament Management System
• Standardized Accounting System
• Data Transport Utility

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SECTION MANAGEMENT SYSTEM
Web Apps
Tournament Management (ScoreCast)
Customer Management
Section Membership
Event Management
E-Contact Management
Reporting Tools
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SMS BENEFITS

• Single membership database
• Standard chart of accounts
• Increased ability to track members
• Elimination of redundant paperwork
• Ancillary benefits
• Section e-mail system
• Section internet access
• Section networks
• Membership only website and self service center

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DEPLOYMENT

• Voluntary Buy-in based!
• Actually aided in ramp-up of the system and
  support requirements
• Onsite visits to implement the system into the
  local business processes
• Examined every business process and looked for
  ways of re-building processes within the
  context of the systems capabilities

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TRAINING AND SUPPORT

• In-house support and training provided through
  web-based support ticket system
• Web conferencing used as the platform for
  individual and group continuing training and
  support

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FORMAL SHARED SERVICES
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SHARED SERVICES

• In 2003, the Board of Directors approved the move
  to a formal shared services program the Section
  Admin Program
• Strategy behind decision
• The Section Admin Program consists of two parts
• Membership
• Finance

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CONCEPTUAL GOALS

• National staff provides financial and membership
  services to the sections
• Reduce or eliminate redundancies
• Section staff and officers manage the business
• Enhance section staffs effectiveness
• In the long run, the primary beneficiary is the
  PGA member

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ANTICIPATED BENEFITS

• Expertise in specific areas
• Accounting
• Tax services
• Web site management
• Membership administration
• Independent body preparing financial reports
• Access to state-of-the-art technology
• Provide section staff time to work on serving the
  membership

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IMPLEMENTATION

• Voluntary program
• Started with three sections in first year
• Limited number of new sections on an annual basis
  going forward
• Focused on developing the best systems possible

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MEMBERSHIP SERVICES

• Develop newsletters
• Create and send out e-mails with graphics and
  attachments
• Track non-PGA customers in SMS
• Design event reports for web posting
• Create and maintain online directories
• Process change forms
• Create and maintain web pages

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FINANCIAL SERVICES

• Budget preparation services
• Accounts receivable processing
• Accounts payable
• Payroll
• General ledger
• Tax return preparation
• 1099
• 990
• Sales use tax
• Financial reporting

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PARTICIPATION

• Class of 2004
• Georgia
• Nebraska
• Southern Ohio
• Class of 2005
• Dixie
• Gulf States
• New England
• Philadelphia
• Rocky Mountain

• Class of 2006
• Colorado
• Illinois
• Middle Atlantic
• Minnesota
• North Florida
• South Florida
• Southern Texas

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FUTURE PARTICIPANTS

• Class of 2007
• Connecticut
• Midwest
• Northern California
• South Central
• Southern California
• Sun Country
• Tri-state
• Utah
• Wisconsin

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ACCOMPLISHMENTS

• Section and national staff have worked together
  to solve problems
• Significant transfer of knowledge from the
  sections to national and vice versa
• Nationals chart of accounts modified for
  sections
• Project accounting
• Real-time and secure reporting available on-line
• Implemented accrual accounting

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2005 STATISTICS

• Accounts Payable Department processed 17,574
  invoices totaling 8.95 million
• 10,409 vendor invoices totaling 6,541,574
• 7,165 prize payouts for 681 tournaments
  totaling 2,408,410 (218 paid electronically)
• Payroll Department processed 1,013 payroll
  payments for approximately 47 employees
• Tax Department processed approximately 1,100 tax
  returns and researched 32 tax issues

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OTHER BENEFITS

• Section and staff and working together to solve
  problems
• Eliminated Big Brother
• Standardized member services

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DEMONSTRATION
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QUESTIONS

• THANKS!