Robotics and Automation Society Business Plan Report

Outline Background context Business plan principles Business process

Background Context

Current RAS Business Divisions Four current business divisions Publications Conferences Administration Investments/Reserves

Annual Operating Surplus/ Loss Reserves Surplus/ Loss Current Financial Flow Publications Member Fees ASPP/IEL Non-member Fees Conferences Surplus Book Broker Administrative Travel, Awards Tech. Comm, IEEE Market Gain Market Loss Minimum per TAB 50% Op Expense Reserves Margin Reserves Publications Surplus /Loss Approved Initiatives Income Expenses

Recent Financial History* * All numbers in thousands Stan. Dev Actuals 1998 Actuals 1999 Actuals 2000 Actuals 2001 Actuals 2002 Actuals 2003 Actuals 2005 Budget Op Net Market Chg (14.7)(99.0)(382.8) IEEE Tax(235.8)(631.7) Adjustments(4.1)(39.1)59.3(10.1)(34.1)(216.7)174.3 Net Surplus (431.5)(139.2)986.2 Reserves786.91,190.01,790.21,851.51,420.01,280.82,267.0 Watch List Exp930.91,049.61,110.31,125.62,005.01,545.21,199.21,940

IEEE TAB Rules Reserves can only be budgeted for initiatives in accordance with TAB rules Cannot be budgeted for operations IEEE TAB must approve initiative requests Operating Fund/Watch List rule Negative operations in 2 consecutive years => Watch List Reserves Watch List rule Reserve/Expenses Watch List

Other IEEE Factors New ASPP/IEL formula will cost RAS >$125k per year unless we can obtain more Xplore usage or more articles Reduced Book Broker income expected IEEE recommends non-member rates and has penalized rates below recommended IEEE recommends that member rates cover variable publication costs Highly variable IEEE Administration costs

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

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

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

IEEE Budget Process Op. Bud. ≤ Proj. inc. For year N Initiative Requests Soc. Bud. Req. April, N-1 June, N-1 IEEE TAB Budget Review & Approval Society Budgets Year N }  

Current RAS Unbudgeted Expense Process These expenses come from current operating budget, not reserves Can be added by AdCom, but stay net positive 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

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

Initiatives IEEE TAB approved initiatives can come from society reserves Thus, total budget for the year can go negative, with the initiative cost coming from reserves

Recent Approved Initiatives & Unbudgeted Expenses 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

Some Observations Standard deviation of operating net was $208k IEEE Tax part of operating budget since 2002 Excluding effects of IEEE Tax or market variations, 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: $970k

Business Principles

Motion The business principles and processes listed below shall be adopted as the basis for RAS financial operations.

Business Plan Principles There shall be a process to annually review business divisions and set operating and reserves goals Non-member income should support member services Operating budget surplus and initiatives shall be targeted to manage reserves Consideration should be given to control member costs as well as to new initiatives

Business Plan Principles Our reserves shall Be maintained at or above the TAB specified minimum plus a safety term Suggest TAB min + 50% worst market loss + initiative capacity For example, ($1,940k/2) + ($383k/2) + $125k ≈ $1,300k Be the basis for establishing new initiatives Initiatives are a mechanism for using our reserves to benefit members

Business Plan Principles While initiatives are encouraged when resources are available, strong proposals are expected. Reserves should not be spent simply because the excess reserves are substantial The initiative process shall consider Member inputs Income sources and budget impact Formal independent review of initiative Transition from initiative to ongoing expense or sunset

Business Plan Principles Expenses (to members) of carrying out society business shall be reimbursed 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

Business Process

Annual Business Process FAB review of ongoing activities, in conjunction with boards where appropriate Benefit/cost review of initiatives at end of period Self study from initiative managers Independent review If appropriate, recommendation on continuation or termination

Annual Business Process Divide new initiatives into two categories Fixed duration Secondary impact on budget, use reserve funds Expected ongoing activity Possible initial reserve funding Assess long term operating budget impact Minimum size unspecified, but est. $5,000 Require detailed proposal for initiatives All information required for unbudgeted expenses If over $X, a process plan for implementation Evaluation plan

Annual Business Process Obtain LRPC input on desired annual initiative capacity Board reviews, AdCom decisions; Set ongoing expense budget Set target reserve level Target budget surplus goal to move toward desired reserve level, while avoiding Watch List problems.

Society Budget Process Fall, N-2 Winter, N-1 Committees generate initiative ideas & prelim proposals Review by VPs/Brds or LRPC Detailed proposals prepared    Member Inputs 

Business Process AdCom Review & Decisions FAB Financial Analysis Initiative Activity Review Initiative Requests by VPs, LRPC Initiative Capacity Request: LRPC Rates Conference Goals Financial Status Reserve Goals Anticipated External Factors Budget DecisionsInitiative Decisions ExCom Review ICRA, N-1Spring, N-1 Prop. Bud.

IEEE Budget Process Op. Bud. ≤ Proj. inc. For year N Initiative Requests Soc. Bud. Req. April, N-1 June, N-1 IEEE TAB Budget Review & Approval Society Budgets Year N }  

Some Alternatives and Specific Suggestions under Consideration

Specific Recommendations Member publication subscription rates = variable cost Non-member subscription rate => 2/3 market value There should be FAB representatives on PAB and CAB to help with financial analysis All conferences should have a net positive budget

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

Specific Recommendations Student and "other" (retired, out of work, life member, etc.) fees should be substantially below (e.g., 50% of) regular member fees To the extent feasible, service costs should be borne by those benefiting