Using technology to transform organizational culture and relationships with citizensdigital transformation is seen as a change of paradigm and sometimes labelled as a technological revolution. Innovative technological advancements are significantly transforming the ability of individuals and organizations to deliver high-value digital services. These advancements empower citizens and stakeholders by enabling more efficient, personalized, and impactful service delivery, fostering improved interactions and outcomes. However, while these innovations have created high expectations, their successful implementation requires more than just adopting new tools or technologies.
Digital transformation is increasingly recognized as a cultural change that must occur within the organization. It involves reshaping not only the technological infrastructure but also the attitudes, mindsets, and practices of employees and leaders to fully embrace digital innovation. This cultural shift is essential for aligning the organization’s internal processes, values, and goals with the demands of the digital era. Despite the importance of this cultural transformation, existing literature provides limited guidance on how to orchestrate such a comprehensive change. There is a noticeable gap in frameworks, strategies, and practical steps that organizations can follow to navigate the complexities of digital transformation effectively. This leaves many organizations grappling with questions about how to foster the necessary cultural adjustments, engage their workforce, and ensure the seamless integration of technological and human elements.
As a result, while technological progress drives the potential for digital transformation, its true success depends on addressing the human and organizational factors that underpin long-term change. These last years were revolutionaries for the third sector and no profit sector. The digitalization of the entities allows them to be more efficient, saving money and developing faster. Items like AI and the no code are good solutions at the lack of budget and programming skills. Digitalizing the NGOs could be challenging but is extremely important. The context of usage are accounting, accountability, performance and governance that could be easily improved. There were identified 3 types of digital transformation structured as one the evolution of the other: digital transformation’, digitisation’ and ‘digitalisation’:
Digitisation, as described here, has the lowest impact on systems and identity change. It is the change of the analogical services to digital platform with a more practical way of delivery channel, given that it has become digital. An example in the NGO context could be offering a membership application form available for download on the organization’s website; however, the form still needs to be printed, signed, and mailed back to the NGO to complete the registration. In other words, the core process remains the same, but a digital form replaces the need to request a paper copy. Another example would be publishing the annual report in PDF format on the NGO’s website, instead of providing a glossy printed booklet.
Indeed, digitalisationhas the aim to register changes in the processes beyond mere digitizing of existing processes and forms, as the payment method while donating. Offering the option to make online donations instead of, or in addition to, accepting cash or checks. Another example is an NGO using Enterprise Resource Planning software to coordinate volunteers and manage supplies.
Digital transformation is like the point of arriving, representing a deeper set of changes. Digital transformation can be defined as Mergel said: “a holistic effort to revise core processes and services beyond digitisation and digitalisation efforts. It evolves along a continuum of transition from analogue to digital to a full stack review of organizational policies, current processes and user needs and results in a complete revision of the existing and the creation of new digital services. The outcome of digital transformation efforts focuses among others on the satisfaction of user needs, new forms of service delivery, and the expansion of the user base”. This process is offering new digital tools that consist of items or services to better engage beneficiaries. Examples include AI, machine learning, software etc.
The topic of innovation is central to including and developing quickly and widely. Talking about NGOs is necessary also considering a lot of factors for innovation, considering that the digital one is insufficient, an evaluation is needed also with the surrounding ecosystem as the actors of the innovation, but in this article the focus will be the digital one. In the field of NGOs working in development cooperation, connecting with partners around the world and being able to communicate and interact efficiently became essential. Indeed, it has deeply transformed the organization blurring different types of boundaries. Digital transformation, characterized as the organizational shift driven and influenced by the pervasive adoption of digital technologies, is often recognized for its profound impact on businesses. There are some strategic imperatives essential for these changes.
Digital resources play a pivotal role in driving transformation, encompassing various elements such as data storage, information management, and communication tools. These resources form the foundation for leveraging technology to enhance operational efficiency and improve service delivery. By integrating hardware and software solutions, including advanced technologies like artificial intelligence (AI) and chatbots, organizations can personalize customer experiences. In the context of NGOs and nonprofit organizations, this translates to tailoring services and support to better meet the needs of people in vulnerable situations. A key component of this transformation is digital agility, which refers to an organization’s ability to identify and seize opportunities quickly. In an increasingly unpredictable world, organizations need to develop the capacity to adapt rapidly to change. This requires a strong foundation in digital capabilities, as readiness in the digital space is crucial for enabling swift responses to emerging challenges and opportunities. Given the interconnected nature of society, digital networking capacity has become just as important as digital resources and agility. Building strong connections and partnerships in the digital ecosystem is often a critical determinant of success. This is particularly true for the nonprofit and third sectors, where the ability to collaborate effectively and tap into a network of credible partners can significantly amplify impact. The reputation and expertise of these partners often play a key role in the success of collaborative initiatives. To maximize the benefits of these digital resources, organizations need to harness the power of big data analysis. By analyzing large volumes of data, they can gain deeper insights, uncover opportunities for collaboration, and make more informed decisions. This capacity enhances not only operational efficiency but also the ability to create value in a connected and data-driven world. In addition to investing in digital resources, organizational adjustments are critical for supporting digital transformation. This includes creating flexible structures that can adapt to the demands of the digital era. For instance, organizations may need to establish dedicated digital units or restructure existing teams to enhance agility and focus. Such structural flexibility enables organizations to remain dynamic, innovative, and responsive to evolving digital requirements.
From a human resource management perspective, digital transformation involves reshaping workforce dynamics to align with the demands of the digital era. This entails the recruitment of employees equipped with advanced digital and analytical skills, potentially replacing roles traditionally filled by the existing workforce. For example, in the field of marketing, conventional roles such as brand and product marketers are increasingly being supplanted by specialists in online and mobile marketing. Similarly, data analysts are taking over tasks once handled by marketing researchers, reflecting the growing reliance on data-driven strategies.
One major challenge for established companies is the need to compete for digital talent against new entrants, such as startups and tech-focused firms, which often attract top-tier professionals with expertise in digital innovation. The competition for such talent is crucial for businesses aiming to harness the benefits of digital transformation. To unlock the full potential of digital transformation, organizations must prioritize the measurement of performance improvements using key performance indicators (KPIs). These KPIs play a pivotal role in facilitating learning, evaluating progress, and refining business models. However, the relevance and application of KPIs evolve throughout the different phases of digital transformation:
- During the digitization and digitalization phases, organizations typically adapt metrics to reflect new digital capabilities. For example, they might measure website clicks, video views, and mobile app downloads following the implementation of online and mobile channels.
- Despite these adjustments, overarching metrics such as return on investment (ROI), profitability, and revenue growth remain fundamental for assessing overall success. These metrics are just as relevant for nonprofits, although the goals differ slightly focusing instead on visibility, accountability, and credibility to enhance and expand services.
Intermediate metrics, particularly those tied to digital processes, are especially valuable during the transformation phase. These provide detailed insights into how well a new digital business model is creating value. For instance, digital platforms might track metrics such as online sentiment, engagement levels, network co-creation, and value sharing to assess their impact effectively.
The outcomes of digital transformation extend beyond mere operational improvements. They often lead to new modes of service delivery and innovative ways of interacting directly with stakeholders. Social media, for example, enables organizations to adapt their products and services more swiftly in response to the evolving needs and preferences of stakeholders, including customers and shareholders. This shift is particularly evident in the rise of platform economies, where the primary business model revolves around creating spaces for interactions between external producers and consumers, thereby generating value through connections and collaborations. Digital transformation is also characterized by the rise of smart products that enable real-time monitoring, updates, and feedback. These innovations revolutionize production processes and stakeholders’ relations, blurring the lines between products and services. In the private sector, digital transformation often culminates in the development of entirely new business models, challenging and, in some cases, replacing traditional methods of service delivery and offer of services in general.