Simply put, digital transformation is the integration of digital technology across all areas of an organization, the result of which is a change in how the organization operates and provides value — whether that’s in the relationship between a company and its customers, or a nonprofit and its mission.

While that still may feel a bit buzzwordy, digital transformation is perhaps as straightforward as it sounds. It’s about transforming how all the knobs and wheels of your organization currently line up — from the way you store donor information, to how you deliver services and manage payroll — and integrating them into a cohesive, digital ecosystem.

Why does digital transformation matter to nonprofits?

For most nonprofits, digital transformation can feel too daunting to even consider; however, it’s precisely for this reason that it’s so crucial. More than ever, nonprofits have to be hyper-focused on activities that yield the highest impact to justify the budgets they need to operate effectively. 

Digital transformation allows organizations to have a data-driven handle on how they are performing, on what they should focus their attention, and on where they can find efficiencies. Digital transformation allows organizations to use data to determine how they are performing, where they should focus their attention, and what areas would benefit from streamlining.

What does digital transformation look like?

To understand digital transformation, let’s explore an example: an organization manages its donor database through a collection of excel sheets and launches a donation campaign through a local email client. Donations are then processed through a third-party website.

While this is all happening in the digital world, nothing is connected. Digital transformation in this case would imply moving the Excel donor database to a cloud CRM system (such as Salesforce), which is then linked to an automated email marketing solution (such as Pardot, Marketo or Hubspot), which is further linked to the third-party donation tool (such as Fundly or PayPal) that tracks who donated when, and how much. 

In terms of finding efficiencies, all actions have been logged automatically across the systems. When it comes time to send a reminder email about donations, you can make sure those who’ve already donated are not receiving the same message. And when it comes time to check in with an individual donor, all donation and activity history is neatly documented in their CRM record.

From digital transformation to data-driven decision-making

In the end, was the email campaign an effective way for the organization to collect donations? Were their other activities even more effective, such as paid advertising? Once an organization has undergone a digital transformation, it can more easily step back and see what is and isn’t working, which workstreams merit more or fewer resources, and more generally what steps need to be taken to optimize effective approaches.

While digital transformation cannot happen overnight — it requires internal buy-in, analysis and planning — it does allow a mission-driven organization to move to the next level and ensure that its mission is getting the priority it deserves.

How to get started

Digital transformation begins with an audit of how your organization is currently operating. By department or team, what are your current processes? What tools are you using? Which systems are currently connected? From here, can you map these to your biggest challenges, such as funding cuts, higher expenses, and/or activity impact concerns. 

Based you your audit, you can then take that next step towards digital transformation. And again, while it may appear daunting, it’s absolutely essential to your success.