I. Why Nonprofits?
Doesn't everyone have vendor chaos? They probably do, but nonprofits often find themselves in a particularly thorny spot. Often they wind up being dependent on external vendors for a lot of technology work. Many nonprofits skip over technology representation at an executive level and embed IT under another operational executive. The result is a lack of technological representation at the table.
Vendor chaos isn't a technology problem. It's a leadership vacuum.
Different facets of technology are outsourced. CRM consulting, web design, an IT contractor. Each of these may be competent in their own lane but brought together it's chaos. There is no overarching design, no economic and operational compatibility in the long term technology and operational roadmap. Then there comes the day that a large scale project is required. Customizing something off the shelf, tailoring tools to their needs, or bootstrapping a data initiative.
This situation can happen in nearly any sized organization, but nonprofits seem most susceptible. It's easy to think that you can just have some IT support, and buy technology like a utility. It's like your house - you just need to pay the electric company every month. You don't need to have your own electrician or electrical engineer after all, the house is ready. Just pay the bill.
The analogy falls apart rapidly though. Unless you're buying a fast food franchise where everything is already set up for you, your business (nonprofit as it may be) is going to evolve into a different shape than the next one over. Businesses and business technology needs are not standardized any more than your organization's methods of working, mission, and staff could be swapped with the next nonprofit down the road. Technology is part of the operational branch of a business in the 21st century. It's not a commodity utility we can simply purchase.
Symptoms of a tech leadership vacuum may include:
- Paying multiple vendors yet still fighting fires
- Nobody knows who is accountable for outcomes
- Management reporting requires exporting from multiple tools, manual work and a prayer
- Every tool technically works, but nothing is aligned
II. It's not just you.
Many nonprofits outsource execution before defining ownership. In fairness this isn't limited to nonprofits. A lot of small orgs of every description are guilty as well. Separating execution and ownership is absolutely critical when functions are outsourced. You move the detailed, skilled performance of a task outside your walls, but make no mistake: the complexity, ownership, and liabilities remain inside your organization. Don't expect vendors to manage themselves.
Vendors optimize for their contracts, not your mission. I don't think this one surprises anyone. It's a fundamental misalignment of interests, but one we can mitigate. If there's no one inside the organization who can manage and integrate the vision, here's a great opportunity to bring in an external resource who is your ally to manage the vendor. Depending on your organization and needs, a combination of project management, change management, and technical leadership could be exactly what is needed.
There’s no single person whose job is to ask, “Does this all still make sense together?”. One of the biggest misconceptions I see today is that a CTO or CIO is always the head tech person. The head of IT. The head of research. People can (and do) argue for days over the precise domain differences between a CTO and CIO (and there are some), but the overarching point to make is that there is a need for an executive level role whose job it is to make sure all the organization's strategic goals, and tactical goals, and operational goals, and financial goals, and any other goals we can dream up, will be well served by an overall technology plan that integrates and fuses internal and external technology with the entire organization. That's a long sentence.
There are also aspects of product leadership that tie into this idea - the broad brush concept of there being a single person (or group) who is laser focused on orchestrating the tech and non-tech parts of the machine to be as good as possible at this thing we're trying to do. Even a nonprofit has a product, a service, a goal; something they're trying to accomplish in the world. Who is making sure the technology roadmap is best supporting it?
III. Hidden Costs.
How much time does your organization spend doing manual tasks to coordinate tools that don't talk to each other? How much information is hidden in data that you're sitting on and unable to make use of? When this data is capable of driving vastly more effective service delivery, or fulfillment of your mission in whatever form it is, it pays for itself.
The catch is when a vendor sells you on that line, you implement the technology, and you don't realize the benefit because there's no overall integration into the organization. Extracting value from a technology solution extends past the execution of the project or purchase of the product, and into not only integrating it into the organization, but also transforming the people and processes to make use of the new capabilities. Buying a tool doesn't foster change - but in transforming an organization it's unavoidable.
How many other nonprofits that you know spend more time managing the side effects of their vendors than on taking advantage of the actual innovation?
IV. From Vendor Management to System Ownership
The fix is to appoint someone to own the system and ensure the change happens. As soon as a technology project involves more than two people it's no longer a technology project; it's a people project. Bringing the people along, bringing the organization along, and ensuring the right technology is happening in the right way to support everything is critical. This is the part where we start owning outcomes instead of invoices.
A few high level ideas can transform an organization.
Finding that one person (internal or external) who can look to understand the current, and preserve the right optionality for the needs of the future. This is a balancing act, and a deep understanding of technology, technology transformations, and the dynamics of the organization are critical. They are obsessed with aligning budget, capabilities, staffing, execution, transformation, and ultimately transforming the capabilities of the organization through technology. The technical roadmap and the organizational roadmap become two parts of the same entity, and everyone can understand exactly why we're doing what we are, and what it's worth.
Tools and products are now selected for their ability to engage with and support the unified, aligned vision for the future. Every feature and cost can be traced through the organization to understand its impact and value.
Under a clear and aligned technical leadership vendors become partners in a unified plan, not just silos fighting for budget. Done properly, this method can also help clarify and align other parts of the organization.
Technology now becomes a partner in the organization's unified plan and strategy, and not just a cost center.
When vendor chaos ends, something subtle happens: your staff stop apologizing for the tools, the numbers, the delays, and the manual processes.
Leadership stops asking for “the real numbers.”
And you start spending energy on the mission again not the machinery.
At Pangeus, I help nonprofit leadership teams move from vendor chaos to clarity without hiring a full-time CTO.