Nonprofits on the road to digital transformation

Unit4 announced at the NetHope Global Summit 2023 that nonprofit organizations in the US and UK are making significant progress to digital transformation. The majority will have implemented cloud-based versions of their finance and human resources applications in the next two years. An overwhelming 95% consider that cloud-based solutions will have a positive impact on their organizations, which suggests nonprofits have recognized that digitally enabled IT systems are crucial to responding rapidly to today’s dynamic social, political, and environmental issues.

Key highlights in the research include:

· Digital transformation is a key priority for approx. 6 in 10 nonprofit organizations globally (62%) and slightly more in the UK (64%)

· 43% of respondents globally have already fully implemented cloud-based solutions – that figure is 39% in the UK and 46% in the US

· The majority globally agree transformation is on time (87%), within budget (86%) and with the expected level of interoperability (88%)

· Globally and in the UK the top reasons for transformation are to improve:

o Privacy and security (54%)

o Customer experience (46%)

o Workforce productivity (44%)

· The top three benefits of cloud-based solutions are:

o Better accessibility for remote workers (90%)

o Better collaboration within organization (89%) – this is the top priority in the UK (90%)

o Flexibility to integrate new functionality rapidly (88%)

o Reduced infrastructure costs (88%)

“This research shows that the nonprofit sector is really embracing digital transformation and can see the benefits of moving to cloud-based solutions,” said Chris Brewer, Nonprofit Strategic Industry Architect, Unit4. “The transition should not be under-estimated, 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 nonprofit 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.”

Although the overall picture is positive, there remain challenges to the adoption of cloud solutions for finance and HR applications. Globally, the major issues are a reluctance to change from users, information being in silos and issues with integration to existing systems. Interestingly in the UK, resistance to change and willingness to invest from the board makes it into the top three ahead of integration issues.

Having access to more budget and improved resources in terms of the skills available and time to implement change are seen as the main way to support the full transformation to cloud-based solutions. However, just over one in ten in the UK also say that they need more support with integrating cloud-based applications, which underlines that nonprofit organizations must understand that digital transformation will require some level of change management if it is to be successful.

There is also debate over which functions in nonprofit organizations should be automated. Globally, the top priority is the maintenance of regional and global contracts and suppliers, whereas in the US it is allocating and reporting dynamic indirect cost allocations. It is also prioritizing the automation of the maintenance of donor information and reporting. In the UK, automating global contracts and suppliers is the top priority, but it differs from the US in saying that its other focus for automation is impact planning and monitoring, as well as regulatory, compliance and sustainability reporting.