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Only 8% of NGOs have a digital transformation strategy, according to a study by ESADE and PwC

‘To thrive in the digital era’ NGOs must ‘embrace a single core strategy that involves the entire organisation’, the report by the ESADE Institute for Social Innovation and the PwC Foundation concluded

In an increasingly demanding environment, third-sector organisations must adapt and evolve rapidly to maximise the impact of their work and tackle the most important challenges of an era in which digital transformation acts as a catalyst for major social changes. However, according the report ‘Digital transformation of NGOs: concepts, solutions and case studies’ by the ESADE Institute for Social Innovation in collaboration with the PwC Foundation, today most NGOs are still merely starting the process and ‘only 8% of NGOs have a digital transformation strategy defined as such’. The document, which was presented today in Madrid within the framework of the tenth anniversary of the ESADE-PwC Social Leadership Programme, aims to serve ‘as a starting point to explore the challenge of digital transformation at social organisations and its impact on all stages of their activity’.

Strategy and change leadership

‘To survive as an organisation, third-sector organisations are going to have to consider a profound change that will transform their operations and could even make them rethink their strategy, defining how the organisation should develop in future in a digital society’, said Ignasi Carreras, director of the ESADE Institute for Social Innovation. This is because ‘it is not a question of defining a specific digital strategy, but rather embracing a single core strategy that involves the entire organisation if they are to thrive in the digital era’, he continued.

Some of the main challenges for the successful development of a digital transformation strategy identified by the report were ‘having the necessary talent and providing appropriate training (57% of NGOs claimed to have staff limitations, whilst 55% emphasised the need to train their employees), overcoming budget constraints, the complexity and oversupply of new technologies, and the long-term impact’.

‘Digital transformation will never be successful nor can it be integrated into the organisation if the organisational culture is not also adapted’, said Carreras, and ‘that requires leadership capable of overcoming resistance’. In this regard, the report cited three main limitations: ‘risk aversion, a lack of effective organisation-wide work, and insufficient “customer” (users and/or members) orientation’.

According to the report, it is advisable to set up a specific task force to oversee the initial move into the digital domain (as 47% of NGOs do), although in the medium-to-long term, efforts should be made to integrate this effort across the organisation. ‘A hybrid organisational structure enables greater integration across the organisation, although the initial process can sometimes be expedited by setting up a specific digital task force’, Carreras explained.

Objectives and challenges

The report looks at all stages of the digitalisation process and the objectives of each one. According to the survey conducted by the ESADE Institute for Social Innovation and the PwC Foundation, the main objectives that NGOs pursue with their digital strategies are ‘first, to reach a larger public and grow their social base (81% of the cases); second, more efficient use of resources and better team and process management (61%); and, finally, to improve their programmes and services for users (40%)’, said Emilia Caralt, co-author of the report and a researcher at the ESADE Institute for Social Innovation.

Digital transformation provides ‘tools that allow us to learn about and communicate better with our public and collaborators, increasing our potential to engage them and boost loyalty’, Caralt said. Technological advances ‘have multiplied the available tools and channels’, making it necessary to have ‘an integrated multi-channel strategy, a single homogeneous proposal for all communication channels’, she cautioned. According to the researcher, ‘digital transformation also provides tools to improve team and resource management and optimise workflows’. Some of the main challenges identified by the report in the area of internal processes were ‘taking advantage of NGOs’ willingness to improve their internal flows in order to embark on a digital transformation; embracing cultural changes; alignment with the digital champions in each department; providing support for the sense of urgency in the form of empathy on the part of management and appropriate training for workers; carrying out an adaptation process; and making sure that the investment in technological tools goes hand in hand with cultural changes in the organisation’.

The main benefits that digital transformation offers to programmes and services are ‘the ability to automate services, increased possibilities for collaboration, and the potential of a culture of innovation’, Caralt explained. ‘Getting to know our users and donors better allows us to incorporate new tools that make it possible to adapt our programmes to them; it offers new ways to learn more about them and tailor our offer accordingly’, she added. Some of the main challenges are ‘using technology to transform the programmes and improve the quality of the services provided to users; reducing the time between data collection and decision-making through the use of advanced data analytics; the redistribution of roles in the third sector as a result of the disintermediation; fostering a culture of trial and error; and open innovation and collaboration’.

Also speaking at the event were Marta Colomina, Managing Director of Marketing, CSR and the PwC Foundation; Andrés Conde, CEO of Save the Children Spain; and Noema Paniagua, Managing Director of the Spanish Cancer Association (AECC).