The non-profit sector faces unique challenges and an online hub for data and services can provide a path out of current complexity
The non-profit sector is under pressure from all angles. Players compete with other good causes for donations and funding, they must stay in compliance with shifting rules, they must manage campaigns effectively and serve a large roster of stakeholders with a modest number of internal staff. And, just as much as any for-profit enterprise, they need to turn to technology for the automation, operational excellence and flexibility they sorely need.
And all the evidence we are seeing suggests that they are doing so. According to our survey in 2023, 59 percent of UK and US nonprofits say they are increasing technology spending and 23 percent say they are increasing that spend “significantly”. That willingness to invest includes core systems too with 57 percent planning to select or deploy a new ERP inside 12 months.
Having been developed with mostly modest budgets, non-profits need to modernize and reap the power of a technology leapfrog. Paper-based processes or data islands on piecemeal software offer a poor combination for attracting staff or for satisfying complex needs. As with any organization, the restrictiveness of legacy IT is a barrier and, as with most organizations today, non-profits are turning to the cloud for a unified approach to managing operations. Our experience is that for non-profits, moving core services to the cloud is a case of ‘when’ and not ‘if’, and the cost of change is overwhelmingly outrun by the cost of not changing.
The benefits of continuous software improvements, program and data integration, universal accessibility and utility-based tariffs are an excellent fit for what nonprofits need today. But beyond these, cloud also offers an opportunity for process transformation and a path out of legacy.
Growth Director for Non-Profits at Unit4.
Best practices
For non-profits pondering IT change, our experience tells us there are some clear best practices to be observed.
Organizations must first have in place a vision of their future state and the reasons for transformation. They should also take a process-first approach where thinking is led by the need to make processes simpler and smoother. As holders of highly sensitive data, they need a clear plan for what data they need to collect, what they want to do with it and how to handle it safely.
Change should be iterative and be governed by a formal change management approach because research from change management leader Prosci suggests that will lead to a sevenfold improvement in likelihood of success. We have seen a lot of success in hybrid technology change models where there is an overarching waterfall model based on linear sequential phases in place that is combined with sprints that raise morale and make iterative change visible and tangible.
Smart nonprofits pursuing change should be led by business leaders and experts with change experience and realistic plans for budgeting and resources. But they must also involve their internal staff from the off, explaining the reasons for change, what will change, how that change will occur and what effects changes will have on them. Internal teams should be intimately involved in workshops on the design and automation of tasks because they are the ones that will be using these tools. Technology is key but people and processes are even more important.
Change effects
Moving to cloud and modernizing core systems in a unified fashion is a boon for a sector that is often pressed for time and resources. Automation and well grooved processes are needed to extract manual inputs from processes and to mitigate the risks of staff burn-out.
The unification of assets typical in a cloud implementation helps to bring together the disparate strands required by non-profits such as the need for greater stakeholder engagement, managing fundraising programs and showing auditability to regulators. Our surveys back this up by showing that digitally mature organizations outperform laggards significantly and lead to four times more motivated staff, three times better culture and double the confidence of staff in their employer’s future. Collaborative capabilities (so key for what are often multinational and broadly funded organizations) accelerates by 28 percent and performance by 35 percent.
Cloud is also a good fit for contemporary non-profit agendas where concerns are led by cybersecurity and data privacy, the ability to add new programs swiftly, enabling staff to work remotely and integrating data to make it easier to mine and analyze for insights. A little over half of non-profits say they can collect data but a little under half are confident in their ability to analyse that data and track effectiveness of campaigns. By creating a central point for that data and a common data model, cloud ERP simplifies that process of going from data point to actionable information and capitalizing on opportunities in close to real time.
Simply put, non-profits using cloud ERPs are able to keep their people, ensure they are motivated and are able to do more with less. The non-profit sector does wonderful things for the people who are most vulnerable in this world but it is also a competitive arena where the efficiencies of the digital data-driven world are desperately needed. Just as slow technology adoption contributed to the collapse of many enterprises, non-profits need to modernize and seize the day.
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