NDIS to create a market economy

14 October 2015

David Andrews, Strategy & Transformation Lead at BDO Brisbane |

With New South Wales and Victoria the latest states to commit to the NDIS—and early transition sites announced for Queensland—the disability sector is now closing in on a truly national rollout.  The opportunity for service providers to reshape and adapt to the new scheme is rapidly closing so what disability services providers need to do in order to be prepared for the biggest shift the industry has seen?

With the NDIS rollout fast approaching, the harsh reality is that those service providers who don’t appreciate the scale of the changes under the scheme are at risk of losing significant market share to more savvy competitors.

There is no denying many organisations are simply under-prepared for the impending changes, particularly given the predominant launch date is less than a year away.

The NDIS will shift purchasing power in a government-based system and put funding and decision making capability in the hands of the service user to choose their provider.

It's now time to adapt

The new scheme creates a market economy in which NFPs will compete with each other and with private enterprise (such as BUPA and Serco) to secure sufficient market share and maintain financial sustainability.

Whilst this means that almost all providers will need to adapt to the new model to boost capability - whether it be incorporating or cutting particular services - it’s certainly not all doom and gloom.

Opportunities await those who prepare

The NDIS presents a great opportunity for providers to improve their current service offerings, as well as their own business operations across the board, ideally resulting in a more efficient organisation that can deliver better services to the consumer and compete effectively with larger organisations and the private sector.

Ultimately, the key for providers is to emphasise their core resources and capabilities. A shift in mindset is necessary to ensure your organisation’s future remains bright under the NDIS.

So as a starting point, you need to have a definitive answer to this question,“What is the core purpose for which our organisation exists?”

Following that, a few fundamental questions need to be tabled for your leadership to understand what elements of your organisation need to be reassessed in order to be NDIS-ready.

Define your offering and services

What services are we going to provide; who are our target service users; what systems need to underpin our offerings? These questions need to consider the entire organisation, right down to frontline rostering, billing and quality oversight. Are there any opportunities for streamlining, especially in the back office; are we equipped and ready to deal with a changing environment and the unknowns of a new market?

How we are helping the sector in Queensland

Myself and the BDO team continue to work with a number of not-for-profits who accept they’ll face strong presence from the private sector post-NDIS implementation, and as a result they will need to adjust pricing structures and operational models to align with the frameworks provided under the NDIS.

BDO worked with the leadership team at one such (Queensland based) organisation to develop a new business model which focused on clearly defined customer segments, value propositions, organisational capability, resourcing, and establishing a cost base and revenue streams.

After working through their main challenges, the organisation took ownership of a well-defined strategic plan and came through the other side with a better understanding of what services and resources needed to be reallocated in pursuit of their new direction.

At the core of the discussion, the CEO recognised the need to strategically align specific staff with clients, and to support them through a clear workforce model, training, recognition programs and IT and communication systems that would help even the most remote front line team member stay in close contact with home base.

Nearly all not-for-profit organisations will need to adapt in some way, shape or form when the NDIS rolls out.  Improving key areas of your business operations can help turn the unknown into a strong future, maintaining revenue streams and engaging more deeply with your service users.