Digital Transformation Project in a Non-Profit Organisation: The Case of a Worldwide Humanitarian Aid Association ()
1. Introduction
The notion of operational system, which merges social and technical elements across various levels, including workplaces, projects, organizations, and industries is introduced by the theory of socio-technical systems (STC) (Appelbaum, 1997). This theory best fits for two reasons. First, it helps to better understand how it improves the quality of people’s working life. Second, it puts emphasis on the fact that DT is not only about introducing technical elements. It also underline the need to consider the social impact technology has on an organisations, people and competences needed to master DT. When studied in a DT project context of a non-profit organisation (NPO), the Socio-Technical Systems theory uncovers a series of challenges (Wolf, Semm, & Erfurth, 2018). One of them it the necessity of integrating both human-oriented and technological aspects. This in turn means understanding and aligning the motivational factors of DT in organisations and the need to consider the role for adequate project management competences.
Two aspects are deserving particular attention. The first is the motivation behind the DT project. The second is the role of project management competences in achieving project success. Therefore, the study aims at addressing two questions:
1) What is the real motivation of DT in the case of the RI?
2) What are the mediating role of result-orientation and the moderating role of personal communication of the project manager to achieve project success?
To answer the first question we built on secondary literature analysis.
To answer the second question, in addition to the literature review we applied the grounded theory to a single case study and made the triangulation with findings from the literature.
As the qualitative characteristic of the grounded theory supports the exploration of areas that are lacking extensive research, we have chosen this theory to explore the research of the topic of this paper. The prior reading has been focused on the motivational aspects that drive digital transformation in NPOs. Some authors have underlined that “Digital transformation is now a strategic priority of organizations across the world, because of the urge to compete, optimize, and change to correspond to the needs of their stakeholders” (Nikita et al., 2024). Furthermore, the authors agree in the first wave of DT intervention that NPOs were essentially concerned with the optimization of management processes and the work with donors. Nowadays, non-profits started looking for more complex DT objectives. These are using social media for fund-raising, measuring program efficacy through data analysis, and signing up beneficiaries and fund providers on customer relationship management tools.
The case being studied is the DT project of the Rotary International (RI). It is a humanitarian and service organisation operating and present worldwide. The DT consists of digitization programme for the administration of RI districts and clubs worldwide. The project (which is actually a programme) evolves with new features and functionalities on a continuous basis. According to the leadership of RI, some of the key objectives of the DT project to be achieved at strategic and operational level are:
increase volunteer engagement and membership;
increase the speed to process grants of the foundation ($200 million), including applications, approvals, and the distribution of funds;
ease fundraising and donor management (digital campaigns);
set-up a learning management system to provide leadership development to its members;
migrate from a historically grown obsolete IT system into a more integrated, global financial and budgeting solution across all Rotary’s international offices;
find the right IT staff.
The paper contributes to two major areas related to DT projects in NPO:
First, the need to understand the meaning and the motivational factors behind a DT. The latter affect the whole organisation and not only the improvement of technical aspects/processes.
Second, the need for project management competences of which result-orientation of the project team and personal communication that play a key role to achieve project success. The second question is based on assumptions from Saidoun, Bodea and Radujković (2023) framework and triangulated based on grounded theory approach. Therefore, the structure of the paper is as follows:
After the introduction we will examine in the second section the background literature, establishing the foundation of the study through a basic analysis of digital transformation (DT) projects in non-profit organizations (NPOs), motivations and the challenges they commonly face.
In the third section, we will discuss the methodology including the data collection and analysis.
In the fourth section, the main results and discussion of the case study in a worldwide humanitarian organisation are presented. Here we will address the mediating aspect of result-orientation of the project team and moderating factor of personal communication for DT project success. Both project management competences are often missing and remain a serious challenge for the project stakeholders.
In the last section we will come up with the conclusion.
2. Literature Review
2.1. Digital Transformation of NPO
Non-profit organisations play a significant role in civil society, contributing both to the gross domestic product of their respective countries and to employment opportunities (Powers, 2019). DT as the STC has shown is principally not only about new technology being introduced. It is defined as “an organizational change that is triggered off and shaped by the widespread diffusion of digital technologies” (Hanelt, Bohnsack, Marz, & Antunes Marante, 2021). It is often praised as a remedy for organizational hurdles, generating enhanced efficiency and effectiveness at the project level. It also supposed to enhance the engagement of NPO’s members through improved communication. Some authors have compared the disruption brought about by DT in organizations and projects with the introduction of electricity two centuries ago (Ng, 2018). Furthermore, DT is changing the internal and external relationships of organisations and the way it operates.
Researchers agree that to the day there is not enough literature on DT in NPOs. Some authors underline that NPO’s are willing to become more business-like following the trends of DT in the private sector. These concepts are described as professionalisation, managerialisation, marketization, social entrepreneurship and corporitization (Maier, Meyer, & Steinbereithner, 2016). Furthermore, the merging of logics between public and private sectors are also considered by some authors as two opposite ideas types that are co-sharing characteristics. These are typical for NPOs (Evers, 2020). This is why the subject of DT is more than just technology shifts. It touches on the culture of the NPOs or the spine of the organisation. Some work has also be done on the management of innovation in NPOs. The link to DT challenges is close (Engel, Dinata, & Antonio, 2023) as is the way to encourage innovation in NPOs (Adro & Fernandes, 2022; do Adro & Leitão, 2020). The social dimension is indeed complex. The complexity of DT projects in NPOs increases due to the employment relationships dimension that exists in NPOs. Some employees are professional full-time paid employees fully dedicated 40 to 50 hours per week to the mission of the NPO. Some are volunteers. They often have less time available for the NPO work. The level of commitment might differ from the first category of employees. Some are external consultants and service providers with different types of contracts. Some of which are special short term missions and others are long term contracts lasting for several years. All these type of stakeholders need to work together and achieve a common goal: make DT project a success.
At project level, the literature remains also rather poor when it comes to analyse the DT project and the interaction of its main stakeholders. The challenges they face during the DT project life-cycle are numerous and diverse (Shahi & Sinha, 2021). Therefore, this paper will only focus on a few of them. In the next section, we will address: the motivation for DT introduction in NPOs.
2.2. The Motivation of DT
At the DT project level different project stakeholders interact with each other and have different motivations. By definition a project is unique, limited in time and innovative, learning attitude is critical in a project as it impacts motivation. The social cognitive approach has gained considerable importance in the study of motivation. It is considered as a highly integrative and holistic way of understanding the concept of motivation to learn (Stipek, 2002). According to this approach, motivation to learn and acquire new competences is determined by both the individual himself and by the environment. “More precisely, it emerges from the continuous interaction between a persons’ perceptions of the learning environment, their learning behavior, and various environmental factors” (Pelaccia & Viau, 2017). Furthermore, the “perception of competence” is the persons’ judgment of his/her ability to adequately succeed with the proposed project objective.
An important challenge of NPOs in general is the development of new capabilities of their stakeholders (see Figure 1), especially when implementing the project such as DT. Therefore, it is important to understand some of the needed competences and their role in the DT project to make it a success.
2.3. The Missing Project Management Competences of DT Project
Teams
Research on DT project in NPOs is rather recent. Some authors revealed that there is generally an alignment of on the meaning of “digital transformation” and its objectives among the main stakeholders. A main reason why the implementation DT projects fail is missing project management competences of the project teams/sponsors. We can rely on the research that has identified the need and role for essential behavioral project management competences impacting DT project success. According to some authors, impacting project management competences are result-orientation of the project team, and personal communication (Saidoun & Bodea, 2021). Furthermore, these authors mentioned the importance of project management on project schedule, project benefits, project quality and project innovation. Building also on the findings on these authors, this paper will focus on roles of personal communication and result-orientation of the project team in a DT project of the Rotary International.
3. Research Methodology
In addition to the literature review of the previous section, we built on grounded theory method within a single case study strategy using interviews as the main data collection technique. The qualitative characteristic of the grounded theory is to “support the exploration of areas that are lacking extensive research and therefore is deemed applicable since the research on DTs is still in its enfancy” (Jong & Ganzaroli, 2024). In addition, as mentioned in the previous section, the grounded theory will help with its qualitative approach to make the triangulation with the findings from the literature.
The study frame is the case of the Rotary International (RI) which is humanitarian and service organisation. Its stated human rights purpose is to bring together business and professional leaders. Their mission is to provide humanitarian services, encourage high ethical standards in all vocations, and advance goodwill and peace around the world since 1905. It is spread across 200 countries with a membership of 1.22 Million individuals (essentially volunteers), spread over 35,000 clubs. As Rotary International embarked on a new leg of its ongoing digital transformation journey, member engagement took centre stage. Their main field of action is focused on seven fields: promoting peace, fighting disease, providing clean water, sanitation, and hygiene, saving mothers and children, supporting education, growing local economies and protecting the environment. The strategic goals and their implementation are interconnected. The DT serves as a central pillar that requires a dedicated project team to achieve the DT objectives.
The organisation’s top leadership following an internal study considers that RI’s growth in different continents and districts around the world made it necessary to take a major step. It is time to up-frame historically created IT systems of the RI in the different parts of the world. It also considers that it is time to integrate these IT systems to enable new data handling procedures to service the organisations mission and implement the projects related to it. The grounded theory helps to structure the interview guide into sub-areas, each with several questions that were relevant to the interviewed persons’ role in the project team of the DT project. A particular attention in the interviews was put on the impact of result orientation of the project team and personal communication as mediating and moderating factors for the introduction of DT by its leadership, which in turn impacts project success.
3.1. Data Collection
We carried out one to one interviews with 7 respondents involved in the DT project of the RI who had actively participated and taken different roles in the project. The interviews were conducted online and lasted between 60 and 90 minutes. Interviews persons were informed about their privacy rights and gave the consider to register the interviews. We conducted interviews with seven project stakeholders, each characterized by their roles and profiles as outlined in Table 1.
Table 1. Characteristics of interviewed project stakeholders (own creation).
Professional
experience |
Function in the organisation (RI) |
Role in the project |
20+ years |
Chief Inform. Officer of RI |
Member of Steering Committee |
20+ years |
Member of the board of a RI Club |
Project Manager |
30+ years |
Incoming President of RI Club |
Project Sponsor |
30+ years |
Past-President of RI Club |
Project Sponsor |
30+ years |
Past-President of a RI Club |
Client |
30+ years |
Secretary of a RI Club |
Team Member |
30+ years |
Board Member of the RI District |
Steering Committee Member |
Source: authors’ creation.
Responding to 10 questions, the respondent’ answers were meticulously recorded, transcribed, and coded to extract first- and second-order concepts as outlined in Table 2. The data was collected of a period of two weeks through semi-structured interviews as both grounded theory and case study mention that interviews are main data collection technique (Lawrence & Tar, 2013). The initial coding process facilitates our analysis of the responses, providing a foundation for the summary and discussion presented in section 4 of this paper.
3.2. Data Analysis
In the RI, DT involves “ways of sustaining the organisation in the longer run”. This was confirmed by almost 90% of the respondents. It consists of a digitization programme for the administration of districts and clubs. The programme evolves with new features and functionalities every few weeks.
“Developing a definition of digital transformation in the context of Rotary’s needs and goals at the start of the project was an essential step that led to its current success and will keep it on track in the future” according to programme manager. RI was supported by an external service provider to provide expertise in assessing and developing a comprehensive digital strategy and roadmap. The DT project is an organisational transformation project where a matrix organization was introduced (IT and its unit became more cross-functional than before).
The programme manager took the reins as Chief Information Officer (CIO) in 2023. He inherited Rotary’s ERP migration from PeopleSoft to Oracle Cloud as one major step in the DT project. The process has been underway for quite some time, which may be beneficial to the organization, as one of the most common reasons for failed implementations is a lack of time to go through the extensive process. As it became clear that the Oracle team would eventually stop supporting PeopleSoft, upgrading their 20-year-old on-prem ERP system gained importance. With his project team, the program manager has many different stakeholders to satisfy. Even though the project has only started in 2023, the topic has been initiated for many years even before COVID-19.
Nahkhalaji et al. (2018) recognized in a study key challenges of NPOs which are summarized in Figure 1.
Figure 1. Challenges of non-profit organisations (Nahkhalaji et al., 2018).
4. Results and Discussion
In Table 2, we can see that DT was mentioned 48 times including the subcodes that are motivation of DT, Result-orientation (RO) of the project team and personal communication (PC). The number of mentions (26) of PC is relatively high illustrating that PC in the leadership of the project is important to master this competence element to make DT a project success. Also the motivational factors with 14 mentions remain high while result-orientation of the project team with 8 mentions remains relatively low. We can also note that a high scoring (18 mentions) of the benefits that the moderating role of PC contributes to project success. This confirms the findings from the literature review.
Table 2. Coding results: digital transformation 48 mentions.
Main Code |
Sub-Code 1 |
Sub-Code 2 |
Number of Mentions |
Digital Transformation (dependable variable) |
|
|
|
|
Motivation of DT (independent variable) |
|
14 |
|
|
Increase project efficiency |
7 |
|
|
Improve processes |
7 |
|
|
Benefits |
3 |
|
|
Innovation |
4 |
|
|
Schedule |
3 |
|
RO of the project team mediates between Leadership and PS |
|
8 |
|
|
Challenges of RO Benefits of RO |
3 5 |
|
PC (relationship between Leadership and PS) |
|
26 |
|
|
Benefits |
18 |
|
|
Challenges |
5 |
|
|
Younger Generation |
3 |
Source: Author’s contribution.
4.1. Meaning of Digital Transformation
We asked various project stakeholders regarding their understanding of meaning of DT project for their organisation. Respondents highlighted the incorporation of new technologies like artificial intelligence to foster result-orientation, optimize data utilization and analysis, and enhance overall decision-making and outcomes. Only very few mentioned the governance, organisation and cultural dimension of the DT project. This underlines the underestimation of the social dimension of the project impact by the stakeholders in charge. In the RI project context, digital transformation encompasses “enhancing project management support and optimizing data utilization to enable improved process, thereby boosting project efficiency, benefits, innovation and project schedule”. DT is also is considered as a need to cope with the evolution of the times, and to address younger generation (including digital generation) who “would probably not join if the digital tools were not introduced in the NPO”. Again, this limits the DT to a user/behavioural dimension. It does not take into consideration the larger picture such as organisation, governance and values of the RI.
Importantly, some respondents emphasized that DT in project settings should serve as a means to an end rather than an end in itself. So in general there was a common understanding among the interviewed persons on the motivation of DT (14 mentions) but also a common neglecting of the larger dimension of DT which includes the process visualisation of the DT plan (including the organisation dimension). This larger dimension is described in Figure 2:
Figure 2. Process visualisation of the DT plan (taken from Nabila Ahmed Nikita & Kazi Sanwarul Azim, 2024).
Interestingly the challenges of RO which include aspects such as the DT plan mentioned above were mentioned several times in both subcodes 2 of Table 2 by the interviews persons.
4.2. DT Project Impact on Various Aspects of Project Success
From the literature review, we can confirm that the impact of digital transformation enhances data accuracy, improves the precision of status reports and forecasts, and increases data transparency. “It also includes aspects such as increased customer/stakeholder satisfaction, increased project control, better team satisfaction and receiving the right information with a single button click” (Saidoun & Bodea, 2021: p. 35). In the following subsections, we will delve into the detailed analysis of how DT affects various aspects of project success.
4.2.1. Digital Transformation Impact on Project Schedule
The respondents underline that DT “will improve the respect of the defined project schedule and help stick to the overall plan”.
Interestingly one respondent mentioned, “delays in the first phase of the project related to the adoption of new IT tools will be offset along the project once the project stakeholders become familiarized with the new tools and platforms”.
4.2.2. DT Impact on Project Benefits
The benefits of a project are part of the approach to project success according to (Ika & Pinto, 2022). Some respondents recognised that “DT improves the accessibility of existing members to more services and information that was previously unknown to them. It will also rejuvenate the membership, increase the number of members and reduce expenses that previously occurred through physical meetings and the need to travel”. Furthermore, decision-making velocity, planning and execution speed, rapid data aggregation, and data analytics (Saidoun & Bodea, 2021: p. 37) were also mentioned as benefits of DT’s impact. “Increasing the reach out of people and getting more volunteers engaging in RI projects” was mentioned as a benefit. Lastly, a respondent underlined that DT benefit “consists in the provision of standardised data, striving for a single source of truth, reduce the number of segmented systems and improve general data quality”.
4.2.3. DT Impact on Project Innovation
Following some respondents, IT literacy will increase. New solutions are brought along thanks to the integration of silos of knowledge and precious data that can be better valued for example through AI. While one respondent mentioned that “DT has not any impact on project innovation”, most responded that “DT increase data security through a modern cloud-based environment, it helped to focus on value and content and improves the overall business process”.
4.3. Result-Orientation, a Mediating Factor for DT Project Success
As previously mentioned social-technical systems (STC) theory addresses technical and behavioural competences. The second ones are of critical importance as they can mediate between the leadership of project team and project success. The author has chosen the result orientation of the project team as a mediating factor between the leadership of the project team and project success based findings of Saidoun, Bodea and Radujković (2023). As a definition of result-orientation, we consider that “result-orientation is the critical focus maintained by the individual on the outcomes of the project” (IPMA, 2015: p. 96).
A result-oriented project team is driven by the desire to achieve specific outcomes, and their collaboration and collective efforts are directed towards reaching those objectives (Bhushan, 2021). The competence element result orientation (RO) can mediate the introduction of DT in NPOs between leadership of the project team and project success as shown in Table 2.
Based on the coding results, result-orientation was confirmed as a mediating factor between the project managers’ competences and project success (14 mentions). As was mentioned by one interviewed expert of the RI project team, “The result-orientation of the project team strongly helped to introduce the new platform despite the resistance of some stakeholders that were in favour of another platform. The latter were not willing to understand the benefits of the new platform agreed upon. The result orientation of the project team is seen by all respondents “as the strong mediator between leadership and project success”. This is meant in the sense “that it helps to stick to the project roadmap and reduces the risks from deviation due to external factors”. One respondent added that “result-orientation as a competence element does not help if the motivation related to DT project are not clearly aligned among the project stakeholders”. In this case, RO still mediates between leadership and project success but with less effect.
4.4. Personal Communication: A Moderating Factor for the
Introduction of DT
Personal Communication plays a vital role in effective leadership in projects. It serves as a cornerstone for building trust, fostering collaboration, inspiring action, setting expectations, and achieving organizational goals (Koester & Lustig, 2012). Overall, “communication emerged as a positive moderator of DT introduction”, as highlighted by all interviewed persons and coding results. They cited two main reasons: firstly, “communication is crucial for fostering team cohesion prior to project start. Secondly, it was viewed as a facet of the project manager’s leadership, guiding the team towards project success during the various phases of the project life-cycle”. However, most of interviewed persons recognized that “communication is not always well mastered and therefore slows down the DT introduction. ‘The communication tools are there but they are not used’, even if reminding emails are sent to the RI members”. Coding results also showed that “communication will improve project schedule and a robust communication plan is important to lead to project success”. Moreover, communication serves as a moderating element by “bolstering project oversight and diminishing resistance to change”. The transformational efforts impact both project and organizational cultures and “resistance to change is perceived as a typical occurrence that impedes program/project advancement”. In one exception, the communication was seen as negatively moderating the relationship between DT and project success. The reason was that “despite all the communication we did, still many people do not consult the online platform”. “Nor do they consult the RI app where RI leadership displays much information of the RI and their local, national and international activities.” The responses of the interviewed persons also revealed that when conducted unprofessionally, personal communication has the potential to erode trust among project stakeholders.
4.5. Limitations
The limitations of the paper are, on the one hand, limited number of interviewed persons amounting to 7 out of the 20 persons contacted. It is also assumed that some of the interviewed persons were lacking some basic knowledge in project management. They were given the tasks within the RI based on their seniority and time availability as RI volunteers. On the other hand, the previous studies finding on which the triangulation was based took place at another period so the findings of this paper could be distorted because of the time factor during which the data collection took place.
5. Conclusion
Utilizing qualitative research methodology, we were able to explore within the framework of a project managed by a non-profit organization the diverse understandings and influencing factors of digital transformation project success. Based on the socio-technical system design (STC) theory, the case study reveals that the dimension of the project did not only impact the technical aspects but even more the human behavioral aspects and social dimension of the organization which is often neglected by the project stakeholders. The behavioral factors became even more challenging when facing a lot of resistance to project implementation in Europe and at governance level of the districts of the RI. The majority of respondents in the study concur that digital transformation involves integrating result-orientation of leadership and personal communication within an organization. This facilitates the respect project schedule, enhances innovation, increases efficiency in data flow, and leads to project success.
Second, the result orientation of the main project team as one social element was confirmed through the triangulation as an important mediating factor between leadership and DT project success.
Thirdly, interpersonal communication acts as a moderating factor between leadership and project success. STC fosters the view of digital transformation as an opportunity that enhances project success within an NPO context.
Fourthly, DT impacts the project management process and the project outcomes can only be realized if project management competences roles are understood.
Fifth, even though NPOs strive for standardization and integration of tools, it must be realised that a “one size fits all approach” is a utopia and that in the field many different systems and technologies will prevail in the RI organisation.
NPOs must produce extra efforts in recruiting volunteers who possess project management skills to maintain the organization’s appeal (Vogelsang, Packmohr, & Brink, 2021). This, in turn, will help to achieve the expected success of DT projects.
Acknowledgements
The author thanks the contributors from the Rotary International for their time during the interviews.