Insights
Industries: Nonprofit

Big companies have embraced the move to the cloud. Are nonprofits ready to make the move?

By Michael Sellai, Partner, Managed IT Services 

Managing a nonprofit brings with it numerous challenges, from finding the resources to advance the organization’s mission, to managing finances so you can keep the lights on, to the constant need to find donors to help fund everything. While many nonprofits receive a large number of small donations, some get a small number of large donations. It’s the latter model that can make for some unique difficulties when it comes to technology.  

Many philanthropists like seeing tangible items they can say were bought with their money: Usually capital expenditures like a building with their name on the wall or an elevator featuring a plaque with their name, but also things like computer servers. The issue comes when the organization wants to implement a modern nonprofit digital strategy, by which donations would go towards operational expenditures rather than capital expenditures. While this money is vital to keep programs running, it does not necessarily have the same cachet among some donors as tangible purchases. 

Nonprofit Digital Strategy: CapEx vs. Opex 

Meanwhile, digital transformation for nonprofits is becoming increasingly urgent. Many for-profit companies have already embraced digital transformation or are in the process of developing digital transformation strategy. In today’s world, this means focusing on digital, cloud-based solutions instead of investing in expensive systems like computer servers.  

For example, a decade ago, a company might have invested in a brand-new phone system. They would have budgeted it as capital expenditure and hired a company to install it, maybe with a maintenance agreement attached to it. However, within just a few years, the phone system might already be outdated or not include essential features. It would then need to be replaced as a capital expenditure, requiring a considerable amount of cash upfront. 

By comparison, an effective nonprofit digital transformation strategy would call for the new phone system to be a cloud-based voice VoIP (voice over internet protocol) service with a reasonable monthly fee billed as an operational expenditure. The digital system would offer improved flexibility, be constantly updated with the latest features and services, and be scalable to fit the organization's needs.  

Cloud Solutions Enable Nonprofit Digital Transformation  

Digital, cloud-based services have been around for more than a decade now, but it’s within the last five years that they’ve really become ubiquitous. Most companies now use third-party suppliers for services like email and data storage, much like most individuals use Google or Microsoft for their personal email account, or use services like Dropbox, OneDrive, or Google Drive to save their files. But nonprofit organizations have the opportunity hand off many other critical services to the cloud. 

Most accounting software packages are cloud-based, ranging from basic applications like QuickBooks to more advanced tools like Sage Intacct. Other examples of nonprofit software that can be offloaded include all-around enterprise resource planning to systems like NetSuite and HR software to cloud-based HR information management (HRIS) systems. The benefit is that the organization gets access to the most up-to-date application version for a monthly fee and customer support that does not expire.  

These solutions cannot replace every software every time, however. Even with the proliferation of different cloud software vendors, there will continue a need in many organizations for custom-built software. And many nonprofits are particularly reluctant to migrate these proprietary operations management applications to the cloud.  

Typically, this software is custom-built and unlikely to have been updated in many years; there is also a low probability that the company that developed it still provides any support. But this type of software has become entrenched within organizations, and it can be difficult for in-house IT who lack the right specialized knowledge to migrate the services to other cloud-based systems. But the ability to securely access this type of data remotely, via laptop or smartphone — especially during the pandemic — has convinced many organizations to invest in these migration projects. 

Another benefit of a nonprofit digital transformation is the reduced administrative burden for departments. Organizations that manage their own servers need IT professionals to monitor them to help optimize performance, do routine maintenance, and ensure they remain secure from data breaches or other cybersecurity attacks. By migrating these services to third-party servers, such as Microsoft's Azure, Amazon's AWS, or Google Cloud Platform, IT staff are free to work on tasks that are true enterprise-level work, like focusing on security levels, identity or device management, and automation. This work could add much value to the organization and help streamline efficiencies for the nonprofit. 

You Don’t Have to Go It Alone 

The prospect of implementing a nonprofit digital strategy from scratch might seem overwhelming to leaders. Nonprofit leaders are often so focused on executing their service mission or raising money to keep operating that the work associated with such a change does not feel worthwhile. But considering the improved service, functionality and convenience of cloud-based applications, the time and effort you put into embracing the digital transformation will likely pay dividends for years to come. 

BPM is fully equipped to provide the technical advice needed to design and implement a digital transformation for nonprofits. Our team of digital transformation professionals has extensive experience in the cloud-based landscape and can guide organizations to the best solutions for their needs. To learn more about how BPM can assist with your business's digital transformation initiatives, contact Michael Sellai, Partner in our Advisory practice and Head of our Managed IT Services team, today. 

 

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