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Digitale soziale Innovation: von Effizienz zu Effektivität in der Digitalisierung

14 Mai 2020| doi: 10.5281/zenodo.3824301

Wie kann Technologie Organisationen helfen, gesellschaftliche Herausforderungen effektiver anzugehen? In diesem Artikel stellen wir das Konzept der „effectiveness in digitalization“ vor, das ein wichtiger Teil bei allen Digitalisierungsbemühungen in NPO ist und zu einer inklusiven und nachhaltigeren digitalen Transformation beitragen kann.

How can technology help organizations to more effectively tackle societal challenges? Not least in times of Covid-19 thinking about how societal challenges can be met with the support of technology has become a ever more relevant question. Recently, we are granting more and more attention to the question how organizational efforts help tackle multidimensional, complex, and interlinked societal challenges . While there is still much to learn in answering this question, we know even less about the role technology plays or may play in these efforts. Looking at existing studies on digitalization of NPO, we find that the focus is frequently put on what we call efficiency in digitalization: how NPO can use technology to function in the best possible manner with the least waste of time and effort. Yet, few studies look into effectiveness in digitalization: how NPO can use technology to more successfully tackle societal challenges. In this article we introduce the concept of effectiveness in digitalization, which, we believe, is key to any digitalization effort in NPO and also likely to contribute to a more inclusive and sustainable digital transformation.

What we know about digitalization in organizations tackling societal challenges

Existing studies on nonprofit digitalization find that only 11% of nonprofit organizations view their approaches to digital as highly effective. 58% of charities don’t have a defined digital strategy or consider digital to be embedded in their strategy. Organizations that do use technology use it to manage client and volunteer data, for administrative tasks and for improving internal processes. And while 76 per cent of NPOs claim to know indicators to measure their impact, only 46 per cent of organizations report on them at least once a year and 39 per cent of the organizations do not collect, analyze or report data that helps them understand their social impact. 60% of nonprofit organizations do not use data at all to make decisions within the organization .In turn, 70% of nonprofit organizations think that digitalization will become relevant for them in the next years in order to enable more efficiency in administrative tasks.

Those studies show not only that there is still much to do when it comes to nonprofit digitalization but also that if technology and data is used in organizations pursuing social goals it is mainly used in improving and/or optimizing support processes. Yet, we have a very limited picture of how technology and data is used in in the actual core of their activities: creating social value. 

Business model approaches and organizations tackling societal challenges

In the for-profit domain, changes in the way organizations create value are often explored through a business model lens. In this context, a vast body of literature has evolved around digital business model innovation and the question how organizations can change or adapt the way they create value in the context of digital transformation. For organizations tackling societal challenges, value creation is different: the main objective is to tackle a social problem and creating value for wider society and/or the environment. Less focus is set on appropriating large amounts of the value created for private gains. 

Zott and Amit (2010) define an “activity in a focal firm’s business model… as the engagement of human, physical, and/or capital resources of any party to the business model (…) to serve a specific purpose toward the fulfilment of the overall objective”. They propose three design elements of business models: content, structure, and governance. Taking this framework to think about the management problems that emerge in non-profit organizations, we find that most digitalization efforts in nonprofit organizations focus on the structure dimension: on solving coordination and communication challenges as well as administrative challenges that are related with organizational efficiency –  functioning in the best possible manner with the least waste of time and effort. Less focus, however, is set on the content and governance dimensions that are, in turn, more related to organizational effectiveness – how organizations pursuing social goals can use technology to more successfully tackle societal challenges. 

Effectiveness in digitalization: opening up the content dimension

The content dimension relates to the question what activities should be performed to tackle social problems: to dimensions and root causes of social problems as well as to weather and how programs and services successfully tackle social problems.

What are the dimensions and root causes for social problems? How are they embedded in the social fabric? One of the major challenges in tackling social problems is the question if we have an appropriate understanding of the social problem and if the approaches to tackle them are appropriate and effective. Societal challenges such as  inequality are highly complex, multidimensional and interlinked problems. The deeply nested and relational nature of the problems poses challenges for purposeful organizational action to overcome it. Better understanding the problems tackled as well as the effects of organizational activities on the problems is likely to foster deeper and broader social value creation. For instance, Understand Homelessness uses data to better understand the  homelessness issue in the united states through visualization and communication techniques and provide inspiration and solutions for city officials, organizations, and citizens to approach this challenge. Other projects aim to better understand  problems like inequality in education or access to social services and unemployment. 

Evidence on whether and programs and services offered by organizations alter for instance patterns of exclusion or prevent powerful elites from capturing program benefits is still hard to find. As stated above, while 79% of non profit organizations consider social impact to be their central measure of success, 39 per cent of the organizations do not collect, analyze or report data that helps them understand their social impact. Additionally, impact measurement is more frequently conducted to prove success to funders rather than to improve programs or services organizations are offering and generating an internal understanding of the value their services and programs create for their beneficiaries and society. However, data and technology can help to understand what does work and what not work in addressing societal  through scientific research but also through capturing data within organizations and programs.  Technology can for instance support NPOs in collecting feedback from their beneficiaries about how they use their services and the long-term effects programs and services generate on their lives.

Effectiveness in digitalization: opening up the governance dimension

The governance dimension relates to the question when and by whom activities should be performed. It relates to questions of access and reach as well as to problems of institutions or unintended consequences

While activities of organizations pursuing social goals were long focused on local level, technology is likely to allow organizations to access a larger number of beneficiaries or extend services and programs offered to generate deeper social value. Better needs recognition may help generate more appropriate services and  programs, products and services adaptation may take place at a faster pace, or technology may allow further away beneficiaries to access services and programs offered. For instance, acessibility options built into websites or online counseling may allow a border number of people to access programs and services also from remote places. 

Particularly in the context of digital transformation existing problems of institutions may change and new ones may open up. Sticking with the example of inequality, new forms of inequality may develop as ownership of, access to and capabilities to deal with technologies and data are distributed unevenly across society. Actors and policies may not be aware of those changes and there may be a lack of mechanisms able and appropriate to tackle those problems. Particularly social entrepreneurs may emerge as actors who solve newly emerging or changed problem spaces and with this tackle emerging unintended consequences or externalities of the digital transformation. Those include for instance organizations tackling hate speech online,  initiatives to address online disinformation or approaches using AI to tackle sexual abuse online

So what? The digital effectiveness canvas 

While the efficiency approach to digitalization is frequently applied in for-profit organizations and meets their focus on maximizing financial returns, we believe that this approach is not equally valuable to nonprofit organizations that (besides being efficient) aim to maximize the social value they create and successfully tackle societal challenges. Thus digitalization strategies should not simply be transferred from the for-profit to the non-profit sector but the nonprofit sector should rather find own approaches that meet the specific and more complex needs of this type of organizations. Figure 1 shows the digital effectiveness canvas. While digital efficiency provides the basis for digitalization in organizations pursuing social goals and is mainly concerned with aspects of organizaitonal structure, effectiveness in digitalization is concerned with questions of content and governance. Thinking about effectiveness in their digitalization efforts will allow NPOs to not only develop their own approach to digitalization but also to shape a sustainable and more inclusive digital transformation that contributes to better tackling stubborn societal challenges and create value for groups in society that are not catered to by markets and politics.

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