Why digital transformation is crucial for nonprofits
- Posted on August 26, 2019
- Estimated reading time 4 minutes
This article was originally published in Charity Village.
We’ve all heard the mantra “do more with less,” and it’s an especially familiar mantra in IT departments everywhere. When applied to the nonprofit universe, the mandate takes on much more serious implications than the private sector, sometimes with life or death consequences.
Although most nonprofits have mastered the art of doing more with less, today’s charities face a headwind of significant obstacles: flat lining contributions, lack of staff and resources, growing competition for donor dollars, outdated legacy technology, a patchwork of systems and processes.
The good news is that many of these and other challenges – some of which are unique to nonprofits – can be aided or even overcome with the help of a digital transformation project. In the private sector, digital transformation has had a tremendous impact on improving efficiency, cutting costs, and boosting productivity. Leading for-profit companies with major digital transformation efforts generate an average of $100 million more in additional operating income each year. The World Economic Forum estimates that major industries that digitally transform will create over $100 trillion in newly created value, new economic opportunity, and reduction of negative market impact between now and 2025.
So, what can digital transformation do for the social sector, nonprofits, and NGO’s? Can it have the same impact as the private sector? And, if so, where’s a good place to start?
When done right, digital transformation helps connect people, processes, and technology. For nonprofits, a digital strategy can help you better serve your constituencies and help fulfill your mission.
Challenges faced by nonprofits
The Avanade team has seen its share of distinct challenges in the nonprofit sector, most revolving around severe limitations of money, talent, and resources.
- Many nonprofits lack the funds for a suitable technology infrastructure or customer relationship management (CRM) system, let alone the experienced IT staff to manage all of that.
- Many charities have outdated and disparate legacy technology, sometimes still using software or hardware that has been discontinued with no technical support options.
- Nonprofit workforces are often varied in makeup with a mix of part-time workers, flex hours, and full-time volunteers, all with varying skill sets and talents.
- Manual processes and unwieldy amounts of data are the norms for many non-profits, which makes human error and security oversights more likely.
- Lack of visibility into the progress of programs and how donations are used – both internally and externally to constituencies and regulators – is a common issue.
How digital transformation can help
Three years ago, Avanade Technology for Social Good started working with Ducks Unlimited Canada, a nonprofit dedicated to the conservation of wetlands and associated habitats for waterfowl, other wildlife, and people. Their technology environment, consisting of several disparate and disconnected systems, at that time was typical of many nonprofits and illustrates how a digital strategy can help on many levels.
Avanade created a digital strategy plan for Ducks Unlimited that included deployment of a unified, cloud-based system using ‘Microsoft Dynamics 365 Finance & Operations’. Once services and applications were migrated to the cloud, it allowed the organization to be more efficient in their processes and resource utilization, allowing their team to access this cloud-based modern ERP system on any device and from anywhere. This digital transformation allowed full visibility internally and externally. Workers could now access data and cloud-enabled services in the field at any time through their mobile devices.
More ways that digital transformation can help nonprofits
Digital transformation isn’t just about modernizing your current technology infrastructure. It’s a way of seamlessly connecting people, processes, and technology to increase productivity, innovate to serve more people, and achieve a high level of trust and transparency with constituencies.
Other tangible ways that a digital effort can help include:
- Automation of manual tasks, reducing costly human errors
- Greater data security that prevents costly breaches
- Actionable data insights that empower strategically-sound decisions about deploying people and assets to the field, such as during a natural or human-made disaster
- Reduced IT staffing overhead by using cost-effective cloud-based services
- Increased collaboration and productivity due to digitally-connected technologies that make every non-profit program more efficient and effective
Most importantly, digital transformation enables nonprofits to increase their impact on society, reach their target audience, and increase their ability to react to situations where they are needed much faster. Non-profits that embrace digital transformation and get the help they need to build a digital strategy will help bring their mission to fruition today and tomorrow.