President’s Reportto the

Executive CouncilBoard of Directors

April 2004Gary Zura

National President

Financial R ecovery P lan

NationalOperations

Governance RevenueDistribution

Focus ResoucesOn M em ber Benefits(O utcomes that best serve 21,000)

NCMA

An effective solution must address three key components of NCMA

Proposed Solution

EVPCFO

RestructureExecutive Postions

Reduce Heads(Public Sem inar)

StaffingLevels

New Mem bershipDatabase Softw are

New AccountingSoftw are

Continuous ReviewO f All O perating Expenses

O perationalEfficiencies

ContinuousIm provem ent

Learning M anagm entSystem

Certification

Contract M gm t M agJounal of Contract M gmt

M em bers O nlyW eb Page

Audio Sem inarProgram

Self-Pacede-learning courses

Instructor Lede-learning courses

Com m unities of InterestV irtual Chapters

Conference Effectivenessand ROI

Im prove Productsand Services

N ationalO perations

Long-Term Financial Solution

Self SustainingChapters

Limit Rebates to $1000 per chapterProvide chapters with revenue generators

Heath Care ConferenceADR Conference

Annual W orld Congress

Sm all Business ConferenceState and Local Conference

Federal Contracting ConferenceAerospace Contracting Confernece

Com m ercial Conference

National ConferenceRevenue

Utilize Natioanal Conference RevenueAs Primary Source of Non-dues Revenue

R evenueD istribution

Proposed Solution

Acknow ledgeFunctional Limitations

Em pow er and HoldStaff Accountable

Elim inate EC(Functional O perations )

8 Chapter ElectedRegional Vice Presidents

1 E lectedCOI Representative

8 AppointedNational Representatives

RestructureBoard of Directors

(S tra teg ic O perat ions)

Add Com m itteeStructure

RestructureBoard of Advisors

G overnanceR estructure

Create Value for the Cost of Membership Accomplishments

• Certification Program– All Modules up and running– Training materials published and continuing development– First Candidates through CCCM

• Richard Berman• Diana Bogusz• Diane Hoag

– First Candidate through CPCM• Richard Berman!--I-270 High Tech Corridor

– 2nd Edition of BOK published– Viable and financially positive

•Jim Hageman•Laura Exley

Create Value for the Cost of Membership Accomplishments

• Conferences---planned and financially viable– Permanent Conference Committee functioning as

planned– Advance planning evident—visibility thru April 05

and still planning– Aggressive and integrated marketing– Financial margins the best in years

• Contract Management Learning Center– Adding content– Chief Knowledge Officer in place

Create Value for the Cost of Membership Accomplishments

• Product Review / Development process– Chief Knowledge Officer and Marketing

Director teaming to build capability in market research, product development, product assessment

• NESS– Continuing to populate with relevant subject

matter– Meeting ’04 sales / budget goals

Create Value for the Cost of Membership Accomplishments

• Build robust program of Communities of Interest (COIs)– Recent “new start” initiative– Building momentum– Chief Knowledge Officer assigned

Understand and Meet Customer NeedsAccomplishments:

• Integrated Marketing Plan in development– Director of Marketing on board since January

• Executive Round Tables—continue– BOA involvement– Held at every conference this PY– Ad Hoc in the “field”

• Stakeholder visits—continue– Advocacy– Needs examination– BOA quarterly communication

Understand and Meet Customer NeedsAccomplishments:

• Membership database– Installed, running, more user friendly

– Posturing to deploy for marketing purposes

• Develop effective Chapter Forums for communication– Chapter President’s monthly letter

– Chapter President’s Forum Web Page

– Chapter Presidents Forum—World Congress

– More to come………………

Build Internal and External RelationshipsAccomplishments

• Building the leverage of the Contract Management Institute – Fundraising and consideration of new initiatives

continue• Leverage the contributions of the BOA

– Continued participation and representation from BOA in Executive Round Table

– Representational appearances– Three members on the PY ’05 Board of Directors– Participation in Strategic Planning and Governance

transformation

Build Internal and External RelationshipsAccomplishments

• Position the NCMA “Brand” in the CM Profession– A continuing challenge– Representational appearances and partnering efforts

• GSA Procurement Guild –Kansas City• ABA Public Law Sector—Annapolis• Fed Healthcare Conference—New Orleans• IQPC Contract Management Conference—Ottawa, Canada• Procurement Integrity Panel –Washington DC

• Build Stakeholders support – Continuing to enhance personal contact with key stakeholders– Board members heroic efforts in Los Angeles with state and local

officials: L.A. Gateway Chapter forming

Ensure Stewardship of Association Resources and Effective Governance

Accomplishments• Continue effective financial management & cost control of

national operations & optimize revenue streams – Since April ’03, Total Assets increased ~24%– Since April ’03, Association “Net Worth” increased ~25%– Since April ’03, Accounts Payable Reduced 42% (lowest in

5 years)– HQ staff headcount stable--managed growth added

competencies and capacity– ’05 Budget 16% increase over ’04 Budget, approximately

the same margins– Financial Recovery Plan at full speed!

Financial Reports - Total

$(800,000)

$(600,000)

$(400,000)

$(200,000)

$-

$200,000

$400,000P

Y99

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01

Jul-

02

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-02

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Jan

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Mar

-03

May

-03

Jul-

03

Sep

-03

No

v-03

Jan

-04

Mar

-04

May

-04

Cumulative Actual

Recovery Plan Initiated

Financial Recovery Begins

Last Program Year This Program Year

Financial Reports - Total (cum)

$(800,000)

$(600,000)

$(400,000)

$(200,000)

$-

$200,000

$400,000P

Y99

PY

00

PY

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PY

02

Jul-

02

Au

g-0

2

Sep

-02

Oct

-02

No

v-02

Dec

-02

Jan

-03

Feb

-03

Mar

-03

Ap

r-03

May

-03

Jun

-03

Jul-

03

Au

g-0

3

Sep

-03

Oct

-03

No

v-03

Dec

-03

Jan

-04

Feb

-04

Mar

-04

Ap

r-04

May

-04

Jun

-04

Financial Recovery Begins

Recovery Plan Initiated

This Program YearLast Program Year

Ensure Stewardship of Association Resources and Effective Governance

Accomplishments

• National Staff postured for growth– Director of Marketing—’04

– Chief Knowledge Officer—’04

– Additional design staff—’05

– Additional Subject Matter Expertise—’05-’06(?)

• Pursue alternatives for governance  streamlining– Governance Committee proposed alternatives Dec ’03

– Board supported dramatic changes

– Streamlined governance posture effective July ‘04

Measures of SuccessSustained Progress Leaves New Challenges for the Future…..• Membership Growth

– Increases in net membership– Sustainment of retention rates

• Subjective feedback from the customer sets– Members – Chapters– Organizations that employ members– Other external customers

• Financial Efficiency and Effectiveness• Hit or exceed revenue targets• Sustain cost economies• Margins on products—return on sales / investment• Accounts Payable and financial credibility • Reserves to meet needs

Challenges Ahead

Total Membership History

14,465

16,180

19,111

21,226

23,524

21,817

23,547

22,375

21,762

20,806

21,380

17,450

21,134

18,897

20,222

21,034

21,074

21,994

21,111

21,505

20,038

12,000

13,000

14,000

15,000

16,000

17,000

18,000

19,000

20,000

21,000

22,000

23,000

24,000

25,000

83-84

84-85

85-86

86-87

87-88

88-89

89-90

90-91

91-92

92-93

93-94

94-95

95-96

96-97

97-98

98-99

99-20

00 -01

01-02

02-03

03-04

We Are Not AloneTrends in Other Associations

Peak Year of Membership

Approx Change since Peak Yr to 2000

American Bar Association

1977 -30%

American Dental Association

1970 -18%

American Institute of Architects

1970 -36%

American Institute of CPAs

1993 -14%

American Medical Ass'n 1959 -48%

American Society of Mech Engineers

1993 -25%

Membership

• Retention continues to be significantly higher than Associations of similar size and type, BUT….

• Weakness remains in Growth—BUT!– March ’04 = Net Increase of 486

– March ’04 = Largest New Member month in 3 years @ 373

– March ’04 = Largest Reinstatement month in 2 years @ 630

Membership StrategyStay the Course

• Create meaningful value to attract new members– How to meet the diversity of needs?– How to better deliver to the constituency?– No Magic Button

• Integrated Marketing Plan – Understand and target potential markets– Promote our value throughout the Association

• Build leverage within the volunteer ranks– Revitalize the Chapter Model

Examining the Chapter Model

– Chapters with no officers– De-chartering / revocation – Membership recruitment flagging– Chapter volunteer activities

waning

– NES-S interest appears to be decreasing

– Web Sites in disrepair

– Officers difficult to recruit and elect

• Symptoms:

• Environmental factors

• Life priorities

• Changing sense of “community”

• Structural evolution—tension of change

Enhancing Chapter Viability• Execute a national commitment

– Strategic objective– Commit resources: staff, volunteer, and technology

• Task Force on the Chapter Model--Mid May ‘04– Evolve an enabling Model– Ad Hoc Board Committee on Chapter Advocacy--July

• Increase Chapter connectivity to Association strategies– Enable local strategies– Seamless and inclusive

Building and Maintaining an Association Leadership Base• Training

– Leadership Summit---grow attendance and quality of program– Mid-Year Leadership Conferences

• Communication– Presidents’ Forum / Council of Presidents– National President’s dialog– Enhanced Annual membership meetings– Staff Resources

• Board of Directors’ role– Committee involvement– Succession planning

SummaryProgram Year 2003-2004

• The Association is stable and postured well for the future– Financially sound

– Governance model agile and streamlined

• There are challenges in growth and in evolving the Association’s culture

• The present begins in the future!– What we commit to “Being” in the future, not the past,

will determine our actions today!