Is Your Agency in Need of a Digital Transformation?

I recently came across a great article written by Open Mind’s Founder, Monica Oss around Digital Transformation. First off – what do we mean by Digital Transformation? Yes, the phrase sounds like something an expensive management consultant came up with, but at the core it’s really just about the change an organization experiences when they apply new digital technology.

Her article focuses around technology that improves the client/customer experience. It covers questions every agency should be asking themselves to better understand the digital expectations of the people they serve and their families. She poses questions such as: 

1. Can clients find out what they need to know about your organization and make an inquiry about services online?
2. Can they schedule services online?
3. Are some of these services delivered via technology platforms?
4. Does your organization have a single virtual point of access for incoming inquiries?

Can consumers complete the required “paperwork” for their services online?

While her article was focused on outward-facing technology, it got me thinking about how it was just as relevant when applied to technology meant to enable internal processes and satisfy the expectations of your own employees.

Yes, consumers have high expectations of the organizations they get services from, but employees (especially the new generation) have huge expectations when it comes to the digital tools they receive from their employers. With high turnover rates in Human Services and the constant struggle to compete for top-notch talent in the industry, ensuring you meet the rising expectations around technology when it comes to your workforce could make a huge difference in your agency’s ability to attract and retain talent.

Here are some key questions to ask yourself:

1. Do managers and supervisors have access to real-time data to make decisions around purchasing, budgets, staff scheduling, and expenses?
2. Can employees self-serve when it comes to things like finding their pay stubs, requesting a shift or trading shifts, doing their expenses, or requesting time off?
3. Are your systems all connected to reduce the need to do manual entry from one system to another?
4. Are all your internal systems accessible on any device, anywhere? And if they are, are you sure they’re secure and people have the right permissions?
5. Are there automated checks built into your system to detect and prevent budget overspending?
6. Do you have on-demand, searchable resources and training available for employees to learn and navigate your internal digital systems?
7. Do you know the amount of time and resources that are dedicated to manual and paper-based processes that could be replaced with technology?
8. Are your systems set up in the right way so that they can generate the funder reporting required without having to spend a ton of time doing manual manipulation?
9. What is the user experience associated with the systems you are using? Are the programs intuitive, fast, easy to learn and have a modern and familiar interface?
10. Does the digital experience adapt to the role of the user? For example, does a Payroll clerk have a different online experience than an employee doing expenses?

If you answered “no” to more than half of these questions, it may be time for you to start thinking about your digital transformation strategy.

Monica Oss mentions in her article, “The problem, of course, is that many executive teams either aren’t ready or don’t know the decisions they need to make to get ready.” She then points to an amazing article from earlier this month from McKinsey & Company that states “digital transformations aren’t games of chance…they do require big and bold commitments in the midst of uncertainty to reinvent the business rather than just improve it”.

The article provides a great framework for what decisions executives need to make and how to go about making them. I’ll quickly summarize below, but you can also download our Decision Making Template to help guide you through the process:

Decision 1: Where the organization should go

Change is not something that organizations usually search out. In many cases it’s triggered by some external factor such as new reporting regulations, tighter funding, growth in the demand of your services, staff turnover, rising costs, audit issues, new management…the list goes on. The article calls it “disruptions that can threaten your long-term viability.” What disruptions are your organization facing? What is needed to deal with them? 

The first stage should always include data and analysis, but also requires vision and creativity. You need to be able to use the data to make wise decisions, understand impacts and identify the opportunities for improvement. You also need to imagine what your organization would look like if it was fully digitized and what that could mean. The article even goes as far to suggest doing a “24hr hack-a-thon with senior leadership.”

Once you are able to paint this vision and have the data to back up why it’s critical to make the vision a reality, you are ready for the next decision.

Decision 2: Who will lead the effort?

It’s amazing how many times we come across the task of choosing a new accounting system being delegated to someone in an administrative role. The digital experience of your employees is the sum of all the systems used at your organization, so treating the purchase of any one system as a “one-off” can severely impact the overall success of the transformation.

The overall strategy and vision needs to be lead from the top – the Executive Director or CEO. However, they can’t do it alone. The team requires senior leaders from across the organization that understand how the Digital Transformation will affect every employee in every department. It’s a good idea to take an audit of all the technology systems that are currently in place and ensure the senior leader responsible for the department using that system is on the team.

Decision 3: How to “sell” the vision to key stakeholders?

In many cases, this is probably the hardest part of the journey. It’s usually referred to as “change management” but at the core it’s really about communication.  The article states “Any change effort requires active communication of the vision and an explanation of why it’s necessary. For this reason, the CEO needs to decide not only what to say but also how—and how long—to communicate.”

The article had a great idea of thinking about the change program like a product, and branding it. (Yes, I’m a bit biased in saying it’s a great idea because I’m in Marketing).  By giving it a name and something that people can refer to, it not only creates awareness, but also excitement.

The Executive Director/CEO also needs to decide who to communicate to and when. It’s important to win over key influencers and ensure they understand and are behind the overall long-term vision.  Too often communication starts with tactics – “we are implementing a new ERP system,” instead of focusing on the WHY.  Start with the long-term vision, the inspiration and drivers for making the change, and then paint the picture of the organization that you want to become in the future. 

The article also states that “CEOs also need to adopt a campaign mentality. This means delivering crisp and clear messages in a steady cadence, using all relevant formats and channels. It’s an influencing program, so messages need to be tailored to each audience—from employees to the board to shareholders.”

Decision 4: Where to position your organization within the digital ecosystem

This is where you go from high-level strategy and vision to starting to think about tactics. You aren’t gathering requirements, picking software vendors or sending out RFPs quite yet, but you are starting to think about what the guiding principles in your transformation are going to be.

This is where you decide on your “technology mantra” so to speak.

Do you want to always be on the bleeding edge of technology? Are you willing to be a beta tester and help guide how products are developed? Or are you OK with letting others be the trailblazers in the industry and rather only upgrade your technology every 2-3 years?

Do you want to go on-premise with solutions and invest in your own internal IT resources to manage the systems, or would you rather have a subscription cloud solution that is completely outsourced and removes the burden on your maybe-limited IT resources?

Are you looking at one solution that is completely connected and can do it all? Or will you pick the best of breed in each category and then connect them all later? Or maybe you’re somewhere in the middle with a system that can do “most of it” but can easily integrate with more niche systems that are best of breed?

Do you want to work with large, horizontally-focused enterprise technology vendors that have lots of money for R&D and keeping the system up to date, or do you want to work with smaller, more industry-specific technology vendors that truly understand your organization and have built a system tailored to the industry’s needs?

What rules and regulations do you have internally around how your employee and client data is handled? Are there Federal or Regional regulations that you have to adhere to?

Understanding the impacts of some of these more strategic technology decisions at the start, can help you narrow you search and ensure everyone is starting with the same expectations.

After this, it’s a good idea to do an audit of the technology landscape available to your organization. Many of our customers started off by talking to colleagues in similar organizations or reaching out to the Association networks they belong to. There are also many sites like Capterra, Software Connect and Software Advice that have comprehensive lists of software available in almost every category.

Decision 5: How to decide during the transformation

Now that we’re on Decision 5, you’re starting to feel like this is a lot of decisions. These are only going to increase once you start your project. The article goes as far as to say, “As boxer Mike Tyson once said, ‘Everyone has a plan ’til they get punched in the mouth.’ No matter how well a transformation effort is designed, there will be surprises and unforeseen developments.”

You need to ensure regular check-ins are scheduled and everyone sticks to these meetings. As different departments may take on elements of the transformation, bringing back information to the larger strategic team is essential. If technology decisions are made in a silo, the ability of the systems to effectively work together to deliver on the strategic vision will be challenged.

Having your “technology mantra” always close at hand will help guide decisions, and reminding everyone about the overall long-term vision regularly will help to reel in initiatives that may not be aligned.

A project dashboard or project collaboration tool, even ones as simple as Basecamp or SharePoint, can easily be the one place everyone can go to check in on the progress.

Decision 6: How to allocate funds rapidly and dynamically

Resource allocation is always a contentious topic at any organization and even more at Nonprofits where funding is limited and the goal is always to have funding go directly to programs over administrative costs such as technology.

But decisions need to be made not only around how much should be invested, but also the speed at which it’s invested. The article states, “Our research shows that raising a company’s Digital Quotient, or DQ®, requires targeted allocation of both capital and operating expenditures. The CEO and top team should act like venture capitalists by following a digital initiative’s progress closely, pulling the plug for projects that lag expectations, and investing more in those that do well.”

Decision 7: What to do when

The article starts off this section by saying, “More than 70 percent of transformation programs fail.” So if you’re thinking why should we even bother, the answer is – when done right, the transformation is what’s going to set you up for long-term success.” (You can check out the McKinsey article How to beat the Transformation Odds to improve your odds)

The key is to have that big long-term vision, but to execute on it in small steps. You need to have quick, early wins in order to gain the momentum to achieve transformation. It’s a marathon and not a sprint. The big benefit of sequencing the transformation is that you can start with a project that reduces costs in one area, and then re-invest those savings into the next phase of the project. These little wins also give the team confidence, something to celebrate, and allows employees to slowly get used to the changes. 

Sequencing doesn’t only apply to something like replacing your accounting system before your HR system, but it also applies to rolling out a new employee scheduling system one location and a time. Always look for ways to break down a bigger project into smaller pieces.

But remember, when looking at smaller pieces, you have to ensure that they are part of that big picture. The article states “Effective sequencing requires clear criteria to evaluate the potential payoff of various parts of the transformation initiative. These should include a hard-nosed assessment of projected benefits, the time needed to capture them, dependencies, investments required, and impact on the overall transformation journey. Sequencing with an eye toward cumulative effect is also necessary, so the business builds towards a cohesive digital whole rather than a jumble of loosely affiliated programs, which can undermine the ultimate benefits of scale.”

Taking that first step towards Digital Transformation is probably the number one thing on the minds of many Executive Directors and CEOs of Nonprofits today. However, knowing what steps to take can be daunting. No matter what your trigger has been to get you to this point (or maybe that trigger hasn’t even happened yet but you know it’s around the corner) the time has come for you to start building that vision. And make sure to come up with a cool brand name for it…for me!

Want to figure out if your agency is in need of a Digital Transformation? Take the 5min online quiz to find out where you rank compared to other Human Services agencies. Take Quiz Now!