Shared Services Are Saving Child Care
The business realities for child care providers are daunting. The average child care center serves about 75 children and employs fewer than 20 people, and most home-based businesses are much smaller. When it comes to back-office administration, banding together through a technology enabled shared services network helps child care providers operate more efficiently and reach the economies of scale they need to weather financial storms.
At Early Learning Ventures, our nationally scaled shared services network is leading the way by linking providers together through our Alliance CORE child care management system. This technology was uniquely designed to bring value to all network stakeholders – providers, parents, third-party payers, and the network back-office. By compiling data from hundreds of providers, we’re able to track industry trends – providing benchmarks for providers and communicating industry insights to funders and legislators.
The COVID pandemic has underscored that technology is essential infrastructure; it is the roads and bridges of the21st century. To survive and grow, child care businesses – especially those that are very small – must harness the power of technology. Yet currently only a small fraction of these businesses use any form of automation, and even those who have purchased technology are rarely using it effectively.
ELV’s Alliance CORE technology, and related support helped keep child care providers in business during the pandemic. While the entire state of Colorado lost 9.4% of all licensed providers, Early Learning Ventures’ Colorado network of providers lost only 2.8% percent of its members. By automating essential back-office functions for providers (attendance tracking, billing, purchasing, human resources, marketing, staff development, etc.), we helped our providers keep their businesses on track and their focus on caring for children.
Providers and Funders Benefit
Child care industry margins are so slim that most programs barely generate enough revenue to cover their operating costs. In addition, maintaining regulatory compliance is increasingly complex and time consuming. State regulators require rigorous reporting from every child care business, yet these providers rarely have access to reporting automation. Efforts to address these challenges often fall flat because the industry is so dispersed. Universal access to a technology enabled shared service network is the answer for both the providers and the funders!
By investing public and philanthropic funding into shared service networks like Early Learning Ventures, funders can effectively build the supply of quality and reach a myriad of small programs in an efficient manner. It is simply not possible, or realistic, for every small ‘mom and pop’ child care business to navigate grant and loan applications and figure out how to restructure their businesses for survival. However, when interconnected through a shared services network powered by a child care management technology, they can equitably benefit from these supply building investments.
Governments and funders can help to stabilize the entire industry by providing free access to 21st century technology and shared back-office services.
We encourage states to make smart, strategic investments in provider-based technology to ensure long-term sustainability. Some states are already taking this approach, including ground-breaking work in: NC,NE, NY, VI, TN and WI – all of whom are using CARES Act, Child Care and Development Fund, and Preschool Development Grant funding to support technology and staffed networks.
In Colorado we are way out ahead of other states with over a decade of work testing and refining staffed networks and automation. ELV’s funders understand the importance of technology use in building provider business management capacity. To increase access to technology, our private funders cover the onboarding cost for all providers transitioning onto Alliance CORE, along with a 3-6 month scholarship to cover providers’ monthly fees during start-up.
Over 95% of ELV members take on the full responsibility of their membership fees after the scholarship ends and they’ve experienced the benefits of automation. We strongly encourage more funders nationwide to make this type of investment a priority.
Another key issue that has emerged in the COVID pandemic is the need for real-time supply and demand data. Provider based technology systems like Alliance CORE make this possible. Indeed, Child Care Aware of America took a sharp turn in strategy when releasing their annual supply and demand report this year. The report, Picking Up the Pieces, focused squarely on the need for better data to inform state-level policy and finance, and underscored the power of real-time data. ELV’s work with Alliance CORE – specifically our ability to track and report daily enrollment and attendance, as well as examine trends and underscore likely challenges -- was included as a featured example. By providing free universal access to child care management technology, states will strengthen their provider base while gaining access to valuable data to inform policy decisions - a win for all!
We're Stronger Together
As the U.S. emerges from the pandemic and begins to rebuild the child care systems that support our economy, it’s time to rethink how we structure, regulate and finance small child care settings. It does not make sense for child care centers nationwide to operate independently. Providing grants and loans to individual providers does not do enough to stem ongoing business failure rates.
Early in the pandemic, Louise Stoney of OpportunitiesExchange wrote an issue brief
Reinvent vs Rebuild: Let’s Fix the Child Care System, in which she challenged the field to change: While recovery dollars are essential to ensuring that ECE programs can continue to operate and re-open, for much of the sector, short-term recovery subsidy, grants or loans will, at best, only plugholes in the status quo. Change is possible. Scale is essential to sustainability.
State decision-makers, funders and stakeholders in the child care industry must get involved with supporting shared service efforts! It’s time to integrate more reporting systems and make shared service efficiencies universally available to all providers.
Transform Your Program With ELV
Successful child care management software implementation makes life easier for the staff at any school, center, or after-school program. Throughout this process, your vendor should be there to help. They will support you with configuration and training so everything goes smoothly during your transition.
ELV child care management systems are one solution that will improve your administrative processes and make running your program more efficient. We'd love to show you how ELV child care management software can transform the way you run your center. Schedule a demo to learn more about the features that can save you time and improve your practice!
Are you looking for more child care management information? Check out our Ultimate Guide to Child Care Management.
Our child care management system makes running your child care program simple and efficient. Get back to what's most important. You shouldn't have to spend more time on the administrative tasks than you do with children and staff.
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Do you run an early childhood association made up of child care providers? If so, check out our Ultimate Guide to Shared Service Alliance.
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