The NetHope Global Summit 2023 is being held in Munich this week. It brings together leading humanitarian non-profits, prominent technology companies, government officials, social impact leaders, and philanthropists. They will discuss the latest issues around technology and non-profits.
Unit4 commissioned DJS Research to complete a quantitative and qualitative survey to identify the state of digital transformation within non-profit organisations. The sample covered organisations in the US and the UK, though not Germany, where the event is being held. The focus of the research was on the impact of cloud-based solutions on non-profits and whether they have transitioned to cloud-based solutions. In some ways, this approach seems dated, with most firms looking at the impact of AI and generative AI in 2023. The impact of the cloud is often assumed. However, in some sectors, the transition is not complete, and thus, this survey clears up some assumptions.
As one might expect, cloud-based solutions are seen as having a positive impact by 95% of respondents. Unfortunately, the qualitative elements did not include why the 5% remains. While the overwhelming majority see the benefits. 86% believe they will have completed a transformation to cloud-based ERP solutions within the next two years. The reality is that the transition has some way to go.
Only 43% of respondents globally have already fully implemented cloud-based solutions – (UK-39%, US-46%). That still leaves a huge number to make the transition. Though the motivation is there, with 62% of all respondents seeing digital transformation as a key priority. These numbers are higher than a study earlier this year by AWS that found 74% of non-profits believe digital transformation is essential. Yet only 12% of non-profits have reached digital maturity.
What has prompted the change to cloud
In 2018, the Founders Technology Group cited the top three reasons that non-profits moved to the cloud as reduced technology costs, the ability to scale and increased mobility. What is interesting about the Unit4 survey is that these factors have evolved. The survey found that Privacy and security (54%), Customer experience (46%) and Workforce productivity (44%) were the main reasons driving change.
However, the benefits seen from moving to the cloud does have some proven benefits.
- Better accessibility for remote workers (90%)
- Better collaboration within the organization (89%) – this is the top priority in the UK (90%)
- Flexibility to integrate new functionality rapidly (88%)
- Reduced infrastructure costs (88%)
Chris Brewer, Non-profit Strategic Industry Architect, Unit4, commented, “This research shows that the non-profit sector is really embracing digital transformation and can see the benefits of moving to cloud-based solutions. The transition should not be underestimated, as it does require commitment from everyone in the organization, but with robust planning and implementation it is the ideal opportunity to modernize business processes, improve productivity and deliver better service. How the non-profit sector is embracing digital transformation shows the value of a cloud-based strategy to drive innovation and that organizations of any size can benefit from it.”
Is it easy?
Unit4 also sought to understand the challenges that organisations still face in the transition. Many of these are familiar.
- Reluctance to change from users
- Information being in silos
- Issues with integration into existing systems
In the UK, resistance to change and willingness to invest from the board are in the top three challenges. Other challenges remain with access to more budget and skills also featuring. In the UK, without board support, it seems likely that many will not make the transition within two years. Despite the willingness to do so by the respondents.
Those Luddite board members should perhaps consider that many believe that transformation projects are successful. With 87% agreeing that transformation is on time (87%), within budget (86%) and with the expected level of interoperability (88%). It isn’t clear whether these responses are from those who have already completed the transformation or just a belief. Other research has indicated that these numbers are optimistic. In 2021, EY noted that only 19% of transformations launched between 2016 and 2019 were successful.
What to transform
One of the reasons for the hesitant transformation may be the decision on what to transform. Non-profits have different priorities and see different benefits from transformation efforts. Automation priorities are seen as:
- Automation of the maintenance of regional and global contracts and suppliers (Global & UK)
- allocating and reporting dynamic indirect cost allocations (US – 2nd)
- automation of the maintenance of donor information and reporting (US – 3rd)
- for automation is impact planning and monitoring (UK – 2nd)
- Automation for regulatory, compliance and sustainability reporting (UK – 3rd)
Enterprise Times: What does this mean
The shortage of skills also means that non-profits must seek help with their transformation. In the UK, one area where this help is needed is in the integration of other applications and the change management process. While Unit4 provides the technology platform to enable transformation, it can bring partners such as BDO to the table. Who have experience in deploying their solutions, integration and change management. BDO are presenting at the NetHope Global Summit on October 18th at 11:00 am CET on the topic of “Embracing Rapid Technological Advancements: Lessons Learned and Selecting Solutions.”
This survey, though small, has some interesting findings that, while it doesn’t seem to cover AI, are nonetheless very interesting and relevant. The arguments for transforming to cloud-based technology have moved on. Historic surveys have sometimes shown that security was a reason for not moving to the cloud. It is an affirmation of what cloud vendors have been saying for years that this view has now reversed.
There is no doubt that challenges remain. But these now seem more human-based and conservative-minded than some of the fears of previous years. The board argument can be won. Resistance to change has always existed and is likely to do so in any industry. Change management is critical to success. But non-profits must evolve, modernise and become as flexible as their commercial counterparts have already achieved.
Perhaps next year, Unit4 will conduct similar research and also look at the impact of AI and generative AI within non-profits.
