5 tips for Nonprofits choosing an ERP system

What are the priorities for Nonprofits when evaluating ERP?

The 2024 Charity Digital Skill Survey shines light on the interest in digital ERP for finance transformation, reporting that:

• 81% of Nonprofits report that digital transformation remains a priority for their organization in 2024
• 80% of large Nonprofits state they are at an ‘advanced stage’ with digital transformation (compared to 68% in 2023)

This makes clear that Nonprofits are on the road to digital transformation, looking to streamline their back-office operations in finance systems for cost and efficiency gains, as well as advanced data management to improve agility and strategy.

Unit4’s recent industry survey, conducted with DJS research, finds that an overwhelming 95% of respondents consider that Cloud-based solutions will positively impact their organizations.

The survey also highlighted the key outcomes driving digital transformation among the Nonprofits interviewed. The main drivers for transformation are:

• Enabling greater collaboration (59%)
• Enhancing reporting capabilities (57%)
• Extending services (54%)
• Re-skilling talent (53%)
• Implementing flexible/hybrid working (51%)
• Attracting and retaining talent (50%)

Digitizing and integrating HR, Finance, and Project data on the Cloud can provide better ways of working for Nonprofit organizations, help provide modern experiences for modern talent and provide the groundwork for Nonprofits to innovate and sustain growth.

5 tips to choose the right ERP

Choosing the right finance system is crucial for Nonprofits, but it can be overwhelming given the array of choices. Nonprofits need to consider the vision for their organization and how a cloud-based finance solution can enable and adapt as markets and priorities inevitably change.

1. Develop a clear use case

Nonprofits looking to invest in digital finance solutions should develop a clear use case, identifying the outcomes they want from their digital transformation.

Whether that’s simply to reduce time spent on manual tasks, to gain visibility of finances, to improve planning capabilities, or to improve employee engagement – without a clear outcome, it can be hard to define and measure success.

Moreover, a clear use case and implementation plan will help get stakeholders, executives, and users on board with digital transformation. Equally, defining the outcomes you want will be key to measuring the success of implementation and the tool itself.

This can help Nonprofits understand the right ERP for their desired outcomes, helping narrow down a large pool of ERP vendors and options.

2. Understand the cost of doing nothing

Sometimes, Nonprofits keep using legacy systems because they have already invested so much time and money into it - they figure they might as well stick with it. However, Nonprofits should also consider the cost of continuing to use familiar legacy processes.

Undeniably, these processes and systems will be made defunct, and using systems that are no longer appropriate for the times we do business in just doesn’t make sense.

Those who do upgrade and embrace finance transformation find that through continuous releases and updates they can easily adapt and innovate, rather than settling for less and creating workarounds for systems that don’t perform. Put simply, often the cost of doing nothing will outweigh the costs of digital transformation.

When considering different vendors, Nonprofits should choose a solution partner that encourages and enables innovation as well as a system that can continually adapt as needs change; Nonprofits need systems that will grow with them, rather than constrain growth.

3. Listen to your users

If the staff and people who use your operational systems aren’t part of your decision-making process, you can miss out on valuable insight. Ultimately, the end-user will be the most affected and you need them onboard before investing so that you can be sure that user adoption is high.

Moreover, without understanding the end user’s challenges, your investment can be wasted, solving problems you don’t have or investing in capabilities you don’t need.

Speak to the end user to understand what works and what doesn’t, what needs to change and what doesn’t, as well as the functionality and capabilities that the end user believes will improve efficiency.

Ultimately, your end users will know your systems best, and their opinions and views on the kinds of outcomes they want will be invaluable when it comes to evaluating different vendors and their ERP capabilities.

Click to read Helping nonprofits deliver on their mission with FP&A and HCM Gated

4. Ensure mission impact

As a Nonprofit organization, the work you do, and the unique mission of your organization are key factors that shouldn’t be ignored during the vendor selection process.

Certain ERP capabilities may help your organization deliver greater mission impact, perhaps allowing you to do life-changing work in a new region, maybe you want to enable hybrid working conditions to empower your talent to do more, or perhaps reimagined procurement processes can help you do more with the money at hand.

Understanding how an ERP can affect not just your back-office tasks, but also how it impacts your ability to achieve your mission, will not only help drive value in ERP implementation but will also make the use case clear for you as well as the stakeholders and teams you need to get on board.

5. Look for success stories

Of course, many Nonprofits across the world are using next-gen Cloud ERP to revolutionize their ability to achieve their mission with a data-led strategy. Reading the success stories or even talking to similar organizations that have already taken the ‘digital plunge’ can help ease a rational fear of change.

Moreover, having real case studies based on Nonprofits who have been able to do more with the help of ERP can present a compelling use case to stakeholders and investors, showing that others out there are digitally transforming with success. These stories can help you understand the capabilities that have the most effect and impact.

How can Unit4 help Nonprofits digitally transform?

Unit4 has partnered with Nonprofits to help them develop their digital agility and deliver on their mission, partnering with Nonprofit organizations such as Oxfam America and the Norwegian Refugee Council for over 25 years.

To learn how Unit4 can help you embrace the latest ERP capabilities made with Nonprofits in mind, why not take our Cloud migration assessment to understand how we can help you, read our many customer success stories with Nonprofit organizations, read about our purpose-built solutions for Nonprofits, or talk directly to sales today!