Applying Key Learnings from 2018 to the Year Ahead
It’s the start of a new year, a blank slate filled with opportunity and fresh perspectives.
Right?
While 2019 affords nonprofits the chance to adjust their technology strategy to improve on what may not have worked as planned, the latest trends in digital transformation for the year ahead reflect some particularly hard-won lessons from the past few years, on both the business and technology sides. Taking the time to understand how these insights came about can help nonprofits avoid making the same painful, expensive and time-consuming realizations.
In the year ahead, we predict that nonprofits will scale-back Big Bang rhetoric in favor of a results-driven, iterative approach to innovation and renewed efforts around operational efficiency.
Prediction 1: From bottom-line delivery to top-line strategy.
Although the way in which nonprofit technologists navigate the path ahead may change, there’s no doubt digital transformation will continue, decentralizing IT and turning CIOs into business executives. Indeed, 84 percent of CIOs at top-performing digital organizations report their role has substantially widened beyond IT, with innovation and transformation being their prime responsibilities, according to Gartner’s CIO Agenda report.
The new paradigm is shifting success measures from bottom-line delivery to simultaneously driving operational efficiencies and supporting top-line data initiatives for improved acquisition, engagement and retention. Per research from IDC, by 2020, 80 percent of IT executive leadership will be compensated based on business KPIs and metrics that measure IT effectiveness in driving business performance and growth, not IT operational measures.
Heightened expectations necessitate a need for a complete view of organizational performance from a single pane of glass. Systems and their respective data sets must be integrated, and central data repositories should facilitate easy access to reporting with drag and drop data visualization, self-guided business discovery tools and easily accessible dashboards to deliver at-a-glance measures of progress against a nonprofits strategic goals – whether or not they live in the IT department.
Prediction 2: Discovering untapped revenue opportunities.
Professional societies offering company member benefits. Trade associations offering individual memberships. All associations looking to fundraising, advocacy, volunteers – typically more charitable/philanthropic business models/strategies. Fundraising organizations offering “membership levels” with member benefits. Nonprofits applying traditional models, like moves management, in new ways to deepen engagement in other programs.
Growth is often at the top of the strategic priorities lists that CIOs are working to help their organizations achieve and 2019 will be no different. Many nonprofits, especially with a membership focus, continue to explore opportunities to boost non-traditional revenue streams. For example, according to ASAE, in 1953 associations received 95.7 percent of their revenue from membership dues. In 2018, that number fell to 41.4 percent for trade associations and just 34.2 percent for professional associations.
Organizations are looking to extend their message and increase the value of their member benefits, but the infrastructure and applications must be in place to support organizational agility while maintaining a good constituent experience. As pressure to drive non-traditional revenue continues to build, we believe that 2019 will see an even greater emphasis on integration of systems, creating centralized data for improved member experiences and quick identification of new opportunities.
Prediction 3: Artificial acuity for long-term vision with immediate value.
While a continued area of focus, artificial intelligence (AI) has yet to fully realize early expectations for revolutionizing nonprofit technologies. Even recent Gartner has acknowledged that, through 2020, 80 percent of AI projects will remain alchemy, run by wizards whose talents will not scale in the organization.
Compelled to curtail IT spending, improve enterprise IT agility, and accelerate innovation, IDC also reports 70 percent of CIOs will aggressively apply AI to operations, tools, and processes by 2021. Personify expects this trend to extend to the nonprofit sector, with 2019 seeing a highly-focused application of this technology in meaningful ways, delivering immediate value by solving business issues in real-time. For example, predictive analytics may help nonprofits proactively identify retention risks in their database while the introduction of chatbot may streamline operations, improving staff efficiency and the acquisition of new members.
Prediction 4: Engagement made seamless.
As consulting firm Bain & Company recently observed, “Managing interactions, or episodes, as part of an integrated journey is one of the top three most effective customer (member) techniques.”
Research conducted for the retail sector by Aberdeen Group reports, organizations with the strongest omnichannel customer engagement strategies retain an average of 89% of their customers, as compared to 33% for companies with weak omnichannel strategies.
OK, but what does this have to do with nonprofits?
Today, exposure to technology is ubiquitous. The consumerization of IT continues, with greater demand from constituents for more integrated experiences that mirror what they see in other areas of their lives. Why can’t the nonprofits with whom they engage be more like Amazon? Or Netflix? Or LinkedIn?
Personify believes 2019 will see omnichannel trends long-influencing the retail sector emerge in the nonprofit space, creating immersive experiences that blur the lines between in-person and digital interactions, regardless of geography. Whether interacting with a national organization, a chapter, a global association, local office streamlined technologies deliver unified experiences will help drive expansion, engagement and retention.
Prediction 5: Honest conversations today, innovation tomorrow.
It is, very frankly, the elephant in the room.
Technical debt is incurred when the more expedient option is taken during the technology development process over the smarter, better choice for the longer term, but which often takes more time and resources to realize. It is also an off-balance sheet liability that’s growing and has not been accounted for as it should be to stakeholders.
With limited resources, the technical debt of associations and nonprofits has been steadily accumulating in organizations for almost as long as they’ve had their existing platforms in place. Fragmented customer databases, systems that haven’t been upgraded in recent memory, time-consuming operational manual processes that should long ago been automated, etc. when viable alternates such as exist pose risk to digital transformation and future success. Per research from Cisco, companies are spending 90 percent of their budgets keeping older IT systems up and running, leaving little for new digital development. What’s more, outdated systems create a fragile foundation upon which to build modern business systems and processes.
In 2019, we believe that organizations will finally take steps to understand, and remediate, technical debt as organizations prepare for long-term growth. While a “rip and replace” of existing solutions may be impractical, recognizing the potential harm existing systems cause, committing to the exploration of the potential cost benefit provided through new technologies and creating a plan to grow beyond the limitations of technical debt are essential for success in 2019 and beyond.