Undertaking “Digital Transformation” at Your Nonprofit? Start Here

By Alex Code

From measuring impact to financial reporting to engaging with donors, technology is transforming the way that non-profits operate. Yet the benefits of “going digital” have gone disproportionately to large organizations who can afford to hire whole digital teams and pay for custom software.

Today, software is cheaper and easier to implement than ever before, yet we hear from many non-profits who feel overwhelmed by options and lack the expertise to even get started. At Line 45, we want to help non-profits of all sizes reap the benefits of digital transformation.

This article is a primer on digital transformation to help non-profit leaders:

• Understand what “digital transformation” really means and what the process looks like on the ground

• Identify the areas where their organizations could benefit the most from new technologies

• Proactively plan to avoid the most common pitfalls when it comes to implementing new tools and systems

Overall, it will give you a framework for kickstarting your own digital transformation or getting a new technology project gone awry back on track. Let’s dig in...

What does “digital transformation” even mean?

Digital transformation. You hear the buzzword all the time. You know you should be doing something about it. But what does it really mean?

In general, digital transformation refers to the process of moving from analog information systems (e.g., paper files) to digital information systems (e.g., digital databases) to improve efficiency and effectiveness. But in reality, the word is too vague to be helpful on the ground.

Digital transformation is going to look very different from organization to organization. To make matters worse, it’s always going to be a moving target. Tools change and technology evolves. Most clients we work with want to start with the tool without first defining what their goals are. For a successful project, it’s important to get clear on what your organization wants to accomplish in your own digital undertaking.

The overarching goals of digital transformation generally fall into one of four categories:

• Improved efficiency – accomplishing more with the same resources. For example, when employees can quickly find the information they need when they need it, they’re able to focus on work that has an impact rather than searching for files.

• Increased resiliency – ensuring that systems are secure and scalable. For example, setting up automatic backups for all your files so nothing can be accidentally deleted, misplaced, or lost in a fire.

• Greater effectiveness – measuring real-world impact so you know what’s working and being able to show that impact to current or potential grant distributors and donors. For example, having data visualizations of your most important metrics that update automatically.

• Improved engagement – reaching audiences where they’re at online in more targeted, engaging, and effective ways. For example, keeping a detailed and largely automated donor database that allows you to reach out to targeted segments at the best times based on their past behaviors.

But how do you know which of these goals you should be working toward or where to begin? That’s where starting with the right process in place comes into play.

What does the digital transformation process look like?

Digital transformation is complex – it’s not just deciding which piece of software to purchase or having an intern scan all your files (if you’re lucky enough to have an intern to pass it off to). To be effective and sustainable, it needs to reach much further into your organization’s operations, habits, and mindset.

Here’s a brief outline of the steps that digital transformation initiatives can (and in most cases should) involve:

1. Clarifying your goals. What does success look like in concrete terms? How would you know you’ve reached it? It often helps to have a single “North Star” metric – e.g., Reduce field note entry time by 30%, while increasing the utility of that information.

2. Choose one area or problem to tackle at a time. Once you start digging into what’s possible, it’s tempting to try and take on everything at once. Stay focused on one thing at a time to not overwhelm your team or yourself.

3. Evaluate current systems and needs in that area involving all affected stakeholders, especially the people who will be working on the ground with these systems. What’s working? What’s not working? To be effective, voices at all levels need to be heard. Getting buy-in from the whole organization should be prioritized throughout the process, not at the end.

4. Identifying the tools – hardware and/or software – needed to address the problems you’ve identified. Include all stakeholders in the selection process.

5. Clearly documenting guidelines for using the new system. What will it be used for? How should it be used? What repeatable processes do you have in place? How will you ensure that they’re being followed? Oftentimes, safeguards can be built into the digital system itself to reduce or eliminate human error altogether.

6. Training and professional development so people know exactly how the system works. It’s often worth choosing a more intuitive tool with fewer features over a feature-rich tool that’s hard to use.

7. Incremental roll out and iteration. Start small with a core group of people who are fully on board to test the new system, collect feedback, and smooth out any issues. Only implement the technology organization-wide when you’re confident that the system works and the guidelines are complete.

8. Continuous improvement. Put systems and processes in place to regularly collect feedback and improve the digital systems you’ve put in place. Ensure that documentation is always up-to-date so that key knowledge isn’t locked away in the heads of a few people.

What kinds of technology should I be prioritizing?

As you begin evaluating your operations and defining your goals, it’s helpful to have in mind the broad categories of technology you can invest in. All non-profits – no matter their size – can benefit from digitization in these core areas:

Project management: Improve the efficiency of your operations with a digital project manager that gives everyone on the team a clear understanding of what needs to be done when, accessible from anywhere on phones or computers.

Internal communications: Move your team’s internal communications from messy “reply all” email chains to a more organized and transparent hub for teamwork, accessible from anywhere on phones or computers.

Information storage: Improve access to your organization’s information by digitizing all of your paper files and keeping everything organized and automatically backed-up in a secure cloud-based storage system.

External communications: Automate as much of your marketing and outreach as possible, expand your digital footprint, and measure the performance of campaigns in order to prioritize the highest ROI tactics.

Relationship management: Systemize your relationship management system to build and maintain meaningful relationships with community members and donors at scale.

Data management: Systemize and automate data collection, management, visualization, and analysis to support operations, outreach, reporting, and strategy.

Financial Tracking: Organize and automate as much of your financial bookkeeping as possible to ensure that accurate reports can be quickly generated at any time.

Biggest barriers to technology adoption at non-profits

Change is never easy. Even when you get the technology side of things right, the human side poses its own challenges. Being aware of the common issues that arise and planning for them in advance can mean the difference between a successful project and a yawning money pit that creates more problems than it solves.

Below are the most common pitfalls we see organizations encounter when implementing new technologies. These barriers to digital transformation are felt by for-profit companies too, but the stakes are often higher at non-profit organizations where resources are limited and donors demand accountability.

Time and budget constraints

To start with the obvious, limited resources are always an issue when it comes to adopting new technologies at a non-profit. The good news is, there’s a lot that can be done with free and open-source solutions. Using open-source alternatives can save an organization thousands of dollars every year. Knowing which aspects of a project are worth investing in and which flashy bells and whistles aren’t worth it will also save you thousands – not only in up-front costs but also in the maintenance of your system. To make your project as cost-effective as possible, find a technology consultant with open-source software experience who will be able to work within your budget constraints rather than opting automatically for expensive proprietary software.

Lack of expertise

Most people working at non-profits got into the work because of their passion for the field, not their passion for technology. As a result, organizations often don’t know what the possibilities are, what questions to ask, or even where to start. Many organizations can’t afford to add a full-time technology specialist to their staff. However, for most small- to mid-sized organizations, money is better spent on a technology consultant rather than another full-time employee. Like an insurance broker who knows the right questions to ask and does all the legwork for you, a technology consultant can help guide you through the digital transformation process, train your in-house staff to run the system, and be on-call for any troubleshooting - all without adding permanent overhead to your organization.

Poorly defined goals

When implementing new digital systems, organizations often overpay for systems that don’t actually accomplish what they need, particularly when paying consultants to build custom software. In order to save money, organizations often skimp on the exploration phase. However, investing in clarity and planning at the beginning of a project is almost always money well spent. Again, this is where hiring the right technology consultant who not only knows the software side of things, but will also ask the right questions at the start will save you time, money, and headaches in the future. When it comes to paying for new technology, it’s best to “measure twice and cut once.”

Lack of buy-in

All too often, digital transformation becomes a top-down process where a few key people in leadership decide what technologies to implement and then expect everyone to get on board. For digital transformation to be effective, all stakeholder groups should be represented throughout the entire process, from goal clarification to training to continued improvement. Not only will you come up with a better end result by including perspectives of everyone who will need to interact with the system on a day-to-day basis, actual adoption of the new technologies will be much easier when everyone feels heard and included.

Lack of training

Even when everyone is on board with using a new technology, it doesn’t mean they have the knowledge to get the most out of it. Organizations often spend a great deal of time and money on the software itself, but fall short in making sure everyone knows how to use it fully. In rolling out a new technology, investing in training and professional development for your staff will empower your whole organization to do their jobs more effectively – often in ways that you didn’t foresee. Successful digital transformation isn’t just about investing in technology, but also about investing in your workforce.

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Digitizing your paperwork and automating your data systems will save your organization time and money. But digital transformation has the potential to do much more than that. Time and again we’ve seen the way that, when done right, new technology projects reach farther into an organization’s DNA to touch almost every aspect of operations – from the way our clients communicate with donors to the way they define and measure success. Done well, it can energize your whole organization and give everyone clarity in working toward a common goal. While it’s not something you can flip a switch and make happen, taking the time and energy to approach digital transformation the right way is well worth the effort. Start the digital transformation process described above by defining your goals, and how they will help you fulfill your mission. Before you know it, you'll be reaping the rewards.

If you have more questions or don’t want to go-it-alone on your digital transformation, call us at (833) 254-6345 or send us an email at contact@line-45.com to schedule a free consultation.