Embracing Digital Transformation in the Nonprofit Sector

For a sector long accustomed to doing more with less, digital transformation can seem intimidating for nonprofit leaders. But a successful digital transformation will empower an entire organization to deliver greater mission and human impact.

According to a new industry report from Collaborative Solutions and Workday, “Embracing Digital Transformation in the Nonprofit Sector,” nonprofits should not only transform their legacy systems and outdated processes, they should help their people embrace change.

“Digital transformation is not just transforming technology. It’s transforming culture,” says Tim DeMagistris, national director of nonprofits at Workday. “It’s creating the digital maturity and technology infrastructure that can handle a nonprofit’s back office, administration, finance, grants, and endowment—so that your people can focus on the mission.”

Legacy systems, cumbersome processes, and murky insights, however, are holding organizations back—a situation familiar to many nonprofit leaders. In a recent Workday study “Closing the Acceleration Gap: Toward Sustainable Digital Transformation,” 58% of nonprofit organizations said, “There is a growing gap between where our business is and where it needs to be in order to compete.”

So how can nonprofits take the next steps to successfully transform their technology, processes, and people? 

The report features insights and best practices from industry experts plus case studies and results from nonprofit organizations that underwent a digital transformation, and it takes a closer look at how leaders can drive change in the following key areas.

• Empower people to deliver change. The report details how nonprofits can improve their employee experience and support their diversity, equity, and inclusion goals to attract and retain talent at a time of high employee turnover and burnout.
  

“For nonprofits, a key question is how they retain talent—how they provide the right environment where their people can excel, so they want to stay for the long term. It’s about optimizing the workforce,” says Michael Merino, vice president of advisory services at Collaborative Solutions.

• Gain a full view of the financial picture. Nonprofits need financial data that offers full visibility into transactions across the organization and leaders who can support all their organization’s finance needs.

  In one of the report’s examples, Mission to the World (MTW), an international nonprofit with 700 missionaries supported by 400 employees, improved the speed and accuracy of its business processes. The financial close went from 3 weeks to 5 days, and the budgeting cycle went from 6 months to 30 days.
  

• Enable IT to become a strategic partner. The right cloud platform can help IT to act as a strategic partner, not just a help desk or report generator. Together, finance, human resources, and IT all become collaborative strategic thinkers and actors. The report explores how organizations can create this critical need.

  “Cross-functional collaboration across the entire organization lifts everyone up and helps move the whole organization forward,” says DeMagistris.
  

• Build a lasting change management program. The report shares how leaders can roll out an effective change management process and help their employees adapt. 

“Digital transformation requires clarity of vision and purpose, and that means being clear about what is expected of a successful implementation and about the benefits it will provide, like greater efficiency and spending less time on data entry,” says Merino.

To learn more about how many successful nonprofits are digitally transforming, read our new report: “Embracing Digital Transformation in the Nonprofit Sector.”