Just like all other sectors, the Humanitarian Sector is ripe for digital transformation. We are already seeing some of the first steps occur, but sadly most of the innovative efforts never go beyond the pilot stage, resulting in what I have chosen to call pilotitis.
If you would ask some of the technology people within the non-profit sector about digital transformation efforts, then they would point out that many organizations are now leveraging various flavors of CRM systems for optimizing their fundraising efforts and that they are now deploying ERP systems to get a grip on their financial management around the world. While this focus on better usage of technology in the “backoffice” is essential, then it is my firm believe that the true digital transformation in the sector will occur when we focus on the use of technology in the front lines.
Donors have over the past decade pushed hard for accountability and as a result NGOs are spending between 5-15% of their project funds on M&E, monitoring and evaluation, (according to IFRC M&E guidelines). Most organizations spend about 70% of their funding on programs, and in recent years humanitarian funding has been around $26 billion and if 5-15% of that is spent on M&E, then we are talking about $910 million to $2.73 billion dollars spent on making sure the funds go where they are intended to go.
Even if my back of the envelope calculations are off by a factor of ten, then these are tremendous amounts that we are spending on simply making sure organizations are doing what they say they will do. But why are we spending so much on M&E? Truth is that most of the M&E efforts are ad-hoc efforts performed in a manual manner. They require lot of manual work in collecting data after the fact and creating reports. I have witnessed first hand in the field small organizations having more people keeping up with donor reporting efforts than they had working in the field.
The current approach to reporting work being done, situational reports and special donor reports are a relic of the past, when communication was expensive and difficult. In his 2008 TED Talk, Institutions vs. Collaboration, the writer Clay Shirky points out that the collaboration and coordination mechanisms we currently use are outdated, because in today’s world, where communication is essentially free and seamless, we can have the systems we use capture information about what we do and then use analytics on top of that data to create real-time reporting of what has been done.
Imagine if we could see in real-time where organizations are working, what impact they are delivering, and where there are gaps in the response. Not only would this small investment in capturing the work being done simplify donor reporting, but it would also revolutionize humanitarian coordination as we know it.
Yet, M&E is simply one small part of the humanitarian response effort that can be transformed through more effective use of technology. Some of the leading supply chain experts in the world looked at how non-profits currently organize supply chains. They estimated that it would be relatively easy to achieve savings of around 40% in logistics costs through effective use of technology and increased collaboration between organizations.
As humanitarian funding becomes harder to raise, it becomes even more important that we put a focus on efforts that can provide large cost savings in the work we do. In order to achieve this transformation, there are a number of roadblocks that we need to address:
We must adapt a collaborative approach to ensure we don’t end up with multiple pilots, multiple systems, multiple approaches to achieving the same results. We must build on approaches that allow for the economies of scale to multiply the collective impact of the transformations.
We must set aside funding for driving these collaborative transformation efforts. The savings we can achieve are so high, that the investments in this will pay back within a single year. Yet most of the funding currently available for innovation efforts is focused on small pilots and not on collaborative system wide efforts.
We must partner with the private sector to ensure we harness the lessons they have gained from transformations of other sectors. We must harness the passion of their employees to make an impact on the world using their experience. We must harness the technologies they have already developed so we don’t start our transformation efforts from scratch.
We must bring together the Humanitarian Transformers within the sector and give them the space and means to drive these transformations forward. They need support from the senior executives in their organizations and within the sector as a whole. We need to break down the organizational barriers that currently restrict us from collaborating on transformations and for that to happen, strong support from the leaders of humanitarian organizations is required.
Achieving digital transformation in the humanitarian sector unlike other sectors is not about saving money for money sake. While it is important that we use the money we have in a better way so that we can make greater impact on people’s lives in the time of their greatest need, the true impact from the digital transformation will come from our ability to work better together as a whole and in our ability to involve those affected deeper in the response process.
If you are a Humanitarian Transformer, like me, then participate in this discussion and get involved by reaching out to me. Together we can achieve anything!
Published March 4th 2019 at LinkedIn