The Tech-Savvy Nonprofit

The Tech-Savvy Nonprofit

What qualifies as a tech-savvy nonprofit? How do you know that your organization is utilizing technology at a proficient manner? Why should you even want to attain a state of tech-savvyness? These constantly evolving questions, but there is some fantastic research available on the corporate side that we can adapt to the nonprofit sector.

Dr. Peter Weill, Director of MIT’s Center for Information Systems Research, notes that companies that “…link their IT investment strategies to their business strategies are well-placed to outrun their competitors along desired performance dimensions…In effect, IT savvy yields a substantial financial premium.”[1]

For nonprofits, the gains may be both financial and mission-oriented in terms of the double bottom line. Nonprofits organizations that adopt technology the fastest, use it most effectively, and develop their own innovations will tend to perform with greater social impact and efficient operations. Those foundations that provide technology funding will likely see more positive program outcome results among the organizations in their investment portfolio. Despite such research in the private sector, the learning is rarely applied in the nonprofit sector by either nonprofits or their funders. While some IT benchmarking tools for nonprofits are available, the fast-changing pace of IT makes such technology-specific benchmarks irrelevant within 2 years.

Dr. Peter Weill and Sinan Aral developed a more general set of benchmarks that suggest that organizations can achieve what they call “IT –savvy” in both their practices and competencies. The indicators they identify for IT-savvy practices can be adapted by nonprofits. I have included the Weill and Aral’s description below with some of my own suggested benchmarking for nonprofits:

Competency

Description

Nonprofit Interpretation

IT for Internal and External Communications

The intensity of electronic communication media (such as email, intranets and wireless devices) used for internal and external communications and work practices.

- Staff use basic electronic communication tools.

- Updates to stakeholders in the form of newsletters, annual reports, etc. communicated digitally.

Internet Use

The extent of Internet-based architecture (i.e. open) in place for key functions such as sales force management, employee performance measurement, training and post-sales customer support.

-Nonprofits use CRM technology and have sophisticated management capability to track donor and stakeholder involvement in mission activities.

- Outcomes data available to management and program staff to evaluate performance.

Digital Transactions

The percent of transactions with both suppliers and customers that are executed digitally.

- Nonprofits collect significant proportion of donations online.

- Organizations collect client data digitally at point of service.

Practice

 

 

 

 

Companywide IT skills

The extent of technical and business skills of IT people, the extent of IT skills of business people, and the ability to hire skilled IT people.

- All staff have basic level of technology skills to be able to operate existing technology and incorporate new IT investments.

- IT competency appropriately outsourced (ie. not core competency of organization).

Management Involvement

The degree of senior management commitment to IT projects and the degree of business unit involvement in IT decisions.[2]

- IT investments made by senior management with involvement from board and IT staff.

- IT return measures incorporated into management decisions and systems in place to collect data.

 

As can be seen in the table above, such indicators of IT-savvy practices and competencies do apply to nonprofit organizations. For example, nonprofits can increase the transactions with donors and clients that are being executed digitally. This IT-savvy practice could lower unit costs for fundraising and service delivery, creating a more efficient operation. Similarly on the competency side, senior management can stop leaving IT-related decisions to their IT people, and become fully engaged with making the strategic IT decisions that will provide the highest social return on investment.

With a basic understanding of what makes up an IT-savvy nonprofit organization, I will turn to how to get there in my next blog. Stay tuned!

[1] Weil, Peter and Aral, Sinan. “Generating Premium Returns on Your IT Investments. MIT Sloan Management Review, April 2006 p.42.

[2] Ibid. p.44.

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