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Nonprofits are on the road to digital transformation

from  November 29, 2023 | 3 min read

A recent Unit4 study suggests that US and UK nonprofits are making progress on their digital strategies, with 86% aiming to have completed the transformation to fully Cloud-based ERP, Finance, and HR applications in the next two years.

We have created a comprehensive whitepaper explaining the research results, and in this blog, we have highlighted some of the main takeaways.

These changes require strong stakeholder alignment and commitment to embrace change and establish robust planning and implementation.

Making digital transformation the priority

An overwhelming 64% of professionals in the UK and 60% in the US have prioritized digital transformation in the next 12 months outside of their day-to-day operations.

Digitization helps nonprofits simplify administration, optimize fundraising, engage with donors and volunteers, and measure social impact more accurately. It also offers broader outreach, connecting organizations with a global audience and new funding opportunities.

Embracing digital transformation is not just a choice but a necessity for nonprofits to remain relevant and resilient and fulfill their missions effectively in the 21st century.

A steady progression to SaaS

Forty-eight percent of nonprofits state that they have started to implement Cloud-based solutions, yet 1 in 10 are only just planning or still considering implementing SaaS solutions.

While there are positives, Cloud solutions for finance and HR still face challenges due to user reluctance, siloed information, and integration issues. Interestingly, in the UK, board willingness to invest takes precedence over integration issues in the top three challenges.

Transformation strategies appear to be progressing steadily, with 43% expecting to complete their digital transformation within two years, 11% within 3-5 years, and very few expecting it to take longer.

Why SaaS and why now? 

Nonprofits must undergo digital transformation to keep up with the modern world. SaaS solutions for finance, projects, and HR can help increase efficiency and impact by providing access to vital data from anywhere.

The most popular reasons organizations have moved finance and HR systems to SaaS are to improve privacy/security (54%), customer experience (46%), workforce productivity (44%), and employee experience/staff retention (42%).

SaaS also enables interoperability (seamless communication and data exchange), which is crucial for nonprofits as it fosters transparency, aids in building strategic partnerships, allows the streamlining of operations, and enhances collaboration. 

Eighty-three percent of organizations state they will select SaaS solutions for new and replacement systems wherever possible.

 

 

Barriers to SaaS adoption

Approximately three-quarters of surveyed responders agree that internal factors are barriers to implementation. The most notable factors are: 

Reluctance to change

The main barrier to transformation programs is the reluctance of staff and stakeholders to change their processes and ways of working. People tend to adapt quickly to using many Cloud solutions for their personal lives, so users need to be on-boarded with the benefits, such as increased flexibility and collaboration. 

Stakeholders may also be hesitant to adopt new systems and technologies, which can cause reluctance toward lengthy transformation programs.

Information silos and integration concerns

Nonprofits often hang onto outdated legacy systems or databases, making it difficult and expensive to integrate newer cloud-based software or carry out a complete digital transformation. 

This lack of integration between different systems can negatively impact the overall efficiency and effectiveness of the organization.

Gaps in the skillset

Many companies struggle to manage SaaS solutions effectively due to a lack of in-house IT expertise. In fact, 70% of companies face this challenge. Selecting, configuring, and maintaining SaaS applications can be complex and may require technical knowledge and support. 

External consultants can help define the strategy, drive change programs, and benchmark progress against industry standards and agreed outcomes.

Lack of training resources

Cloud-based systems are crucial for modern businesses to stay competitive, so they will require more support and resources to help train their workforce to use cloud-based systems and unlock their full potential. 

When asked what would help them fully transition to the Cloud, more budget (69%) and improved resources (69%) are the two key factors in both the UK and US regions. 

Lack of a compelling reason for change 

Most nonprofit professionals (87%) are satisfied with their current enterprise system and resources and, therefore, are less likely to initiate digital transformation programs unless there is a compelling technical, environmental, or financial need.

Final thoughts

Digital transformation is a key priority for 6 in 10 nonprofit organizations, yet there is still a long way to go to catch up with the commercial world. 

Nonprofits are adopting Cloud-based solutions for operations, with most aiming to adopt SaaS solutions for back-office functions within the next two years. They see benefits in accessibility, collaboration, flexibility, and cost reduction. 

However, they need more support in terms of skilled IT and transformation teams, budget, and change management resources. The main challenges include reluctance to change, information silos, and integration issues.

How Unit4 can help with your digital transformation

Unit4's cutting-edge ERP solutions are the driving force behind many of the world's most successful mid-market organizations. Our FP&A, HCM, Procurement, and Project Management capabilities combine to deliver unparalleled real-time insights that empower organizations to achieve their goals with greater efficiency and effectiveness. 

With our unwavering focus on people and flexibility, we've created game-changing solutions that help our customers stay ahead of the curve. 

Unit4 serves 5,100+ customers globally, including professional services, non-profit, and public sectors. Customers include Buro Happold, Devoteam, Global Green Growth Institute, Metro Vancouver, Oxfam America, Save the Children International, and Southampton City Council. 

You can read the full whitepaper here, and for more information, visit www.unit4.com.

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