The takeaway from NetHope Global Summit: ERPs must evolve to accommodate nonprofits

A red heart painted across a large number of outstretched hands | nonprofit Unit4

The world of nonprofits is a highly complex one. Over the years, large organizations have built up diverse application environments due to the diversity of challenges they face when trying to carry out their purpose. For example, if you’re a charity providing relief or services in one region or country, the size and scale of the problem will likely be different in another.

Applications are selected on a local level based on their suitability for any given project, and they don’t always talk to one another; apps are created to fix an issue, integrating with other systems is often ignored, especially when the creation of an app is time-sensitive. This poses challenges for hub organizations when it comes to gathering data on which to base decisions.

Data everywhere, all at once

Most nonprofits now accept it is crucial that all information across their operations is discoverable. Transactions must be observable if the organization is to make strategic decisions about its business plan. The long-term vision is that if a holistic view can be obtained across everything, from grant management to project management and ERP to inventory software, nonprofits will be able to predict demand and react in real-time to user needs. This is underlined in Unit4’s most  recent US and UK study of nonprofits which revealed that digital transformation is the priority for two-thirds of respondents.

When it comes to ERP, nonprofit environments are unique. In a business setting, the manufacturing industry for example, the user may not be interacting with the ERP system directly. However, in everyday nonprofit processes, frontline workers interact with the application, and the information that is fed into it can have a direct impact on how back office support is delivered.

Listening to the participants at the NetHope Global Summit, there was a shared optimism for the future. The role of the back office will not simply be administering supplier invoices, human resources or managing inventory; it will be dedicated to enabling the frontline to do their jobs more effectively.

Nonprofits need adaptability and interconnectivity

The role of ERPs must change. Traditionally, it was seen as the core of back office functionality but now, thanks to open APIs and microservices architectures, it is possible to integrate the ERP with the various types of functionality required to run a nonprofit operation. A nonprofit ERP system needs different layers. A central office hub, which oversees strategy. A regional hub which manages the dispersal of supplies and fields requests from the frontline and finally the frontline ERP, which ultimately must become “my ERP” for the individual frontline worker. This requires a much more agile and adaptable solution, offering a much richer user experience, supported by automation and AI tools to reduce the number of mundane tasks that users must undertake.

We have been working with one nonprofit that collates data using our Unit4 ERP, including measuring the temperatures of patients who visited their local clinics. Using this information, the team was not only able to predict potential malaria outbreaks, it triggered a process in the back office to ensure medicines were delivered effectively to the frontline. This new change meant halting a malaria outbreak two weeks in advance.

ERP evolution: the shift to SaaS

To achieve this evolved state is a challenge. We have worked with a number of nonprofits, all of which have taken significant time to consider their ERP footprints and how individual parts of their organizations can adapt and customize the platform. Customizations are a key part of tackling the complexity left over from legacy applications; a level of technological complexity that can be challenging to overcome.

Moving to the SaaS version of an ERP system means that nonprofits cannot take their customizations with them, which may raise concerns, but the response to this is that transformation is about streamlining processes to make them more efficient and user-friendly. For example, one charity identified that it had 200 applications in one location. For many nonprofits, this scenario could be evident across multiple sites.

Adopting SaaS gives nonprofits the ability to drive through change. Indeed, the feedback received at NetHope informed us that, rather than the current economic situation putting the breaks on change, it was actually a motivating factor for transformation. Nonprofits are realising that their existing IT infrastructure is not capable of responding to the operational demands they face today. They must be more agile and responsive to rapidly evolving environments; this requires greater interoperability between applications, which is not possible with legacy systems. By moving to SaaS, they can create global alignment and communication, making every aspect of the data in their organizations observable.

This shift also resolves the customizations question because enterprise applications should not be customized; rather they should be built for purpose. If you are using a SaaS ERP platform that offers interoperability, nonprofits have the ability to add functionality at the edge of their environment which is relevant to frontline workers in different scenarios. Some ERP providers are actively working with partners to build out functionality..

In the future, we will see more intelligence built around the core ERP application. Depending on the situation, we could add information about weather conditions or details about people migration patterns. This could hopefully lead to allowing a refugee camp to predict a potential upsurge in demand and the back office team could react in advance to deliver supplies to the location.

This more dynamic, smarter model will see the ERP as the cornerstone, sharing data in real-time across different applications to improve the user experience. There will be a flood of opportunities for partners in this sector to build express lanes into software to extract data. Ultimately, the ERP system should become a force multiplier to create a more dynamic and responsive IT environment in the nonprofit sector.