Armanino Blog

Lessons Learned From Nonprofits on the Digital Transformation Journey

July 01, 2019

Digital transformation is happening — and not just in the realm of Fortune 500 and tech-based companies. This trend of fundamentally rethinking how organizations deliver value to constituents is becoming mainstream in nearly every sector of the for-profit and nonprofit world. And small, lean organizations might have more to gain from investing in technology to maximize their mission effectiveness.

Yet nonprofits, by and large, are stuck in the past. While the rest of the world has moved to near-instant reporting, nonprofit management and boards must wait what feels like an eternity for the results of operations. And by the time the books close, the report that board members hold in their hands is little more than a backward look in the mirror.

Meanwhile, generating those backward-looking reports requires a monumental effort from the nonprofit's accounting team and even the CFO. Integrating the general ledger with a dozen or more other software solutions typically requires a hairball of Excel spreadsheets and other clunky, manual workarounds.

These nonprofits — already strapped for talent — are forced to saddle their teams with tedious jobs that keep them from mission-critical work, stifling their potential.

Nonprofits are overdue for a digital transformation. During the Armanino Nonprofit Symposium 2019 events, we spoke with finance and executive leaders in organizations that are undergoing a transformation — not just in the realm of accounting and finance, but in all areas of operational performance.

Here's what we learned about how nonprofits can use technology as a catalyst to leapfrog into the digital future.

Invest Now to Thrive Later

Executives and board members of smaller nonprofits understandably want to know how they can afford such a large-scale project. The better question is: How can you afford not to leverage technology to deliver better data, demonstrate mission impact and improve morale?

Key takeaway: Nonprofit funders, board members and constituents already expect real-time, forward-looking data. Organizations that invest in digital transformation today will continue to grow and thrive in the future — unhindered by costly and cumbersome manual processes.

Your Board Members Already Get It

Nonprofit executives who are navigating this journey say that getting board buy-in was surprisingly easy. Nonprofit board members often already understand the benefits because they have been through similar transformations in their for-profit organizations.

Key takeaway: Go ahead and put "digital transformation" on your next board agenda. Maybe you don't need to spend quite as much time building the business case as you envisioned.

Lock in Funds by Tying Tech Investments Back to the Mission

Board members aren't the only ones who get it. So do your funders. But they won't write that check if they feel that you just want to implement technology for technology's sake. Bring them a cohesive and holistic plan that ties the investment directly to the mission and program outcomes.

Key takeaway: Nonprofits with a clear vision for the future, and a roadmap for using technology to achieve that vision, are more likely to find the funds they need.

Digital Transformation Is a Journey, Not an Event

Establish clear objectives and desired outcomes, and develop a roadmap that hits those milestones. Remember that technology is an important catalyst. But without internal buy-in, any initiative will fail.

Engage internal stakeholders face-to-face whenever possible. Consider forming a steering committee to give them a sense of ownership and show them that they play a role in the initiative's success. If necessary, bring in a third party to provide unbiased, transparent communication. Also, draw on research to show the benefits of digital transformation.

Key takeaway: You're never really done with transformation, so don't kill yourself and your team to comply with some arbitrary go-live date.

Are You Ready to Transform?

Transformation is inherently difficult. But the hard work is worth it when you are driven by a sense of mission. So ask yourself: Are we using technology as a catalyst to improve our programs and mission effectiveness?

If the answer is no, then consider what's stopping you. Often, it comes down to lack of time, focus or ability. Look for the resources — both within your organization and externally — who can help clear those road blocks.

Learn more about how we can help you get started on your digital transformation.

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