THE BLOG
12/20/2013 05:27 pm ET Updated Feb 19, 2014

Why 2014 Will Be the Year Nonprofits Finally Embrace the Cloud

A debate that has raged for years in the corporate IT world has certainly now made its way to the nonprofit sector: single vendor integrated suite versus best-of-breed combinations. It seems like there's never been a good answer -- until now.

The Problem with Integrated Software Suites:

More than a decade ago, Software-as-a-Service (SaaS) was a game-changer for nonprofit organizations. Finally, it was possible to integrate the basic functions of a nonprofit online (CRM, email, fundraising, advocacy) to build relationships with supporters and engage them in meaningful ways in real-time. They were easy to adapt and were tailored specifically for nonprofits. Best of all, SaaS made it all affordable (full disclosure: I co-founded one of those companies).

A decade later, we've seen several major acquisitions in the space, a VC takeover and some smaller players emerge in the space. But it would be hard to argue that consolidation has resulted in better products or innovation beyond a new feature or two. Nonprofits have been forced to accept inferior products in the interest of "seamless integration and simplicity" that never really transpired and with no control over future software upgrades.

While the original intent of these all-in-one solutions was to reduce the number of data silos in an organization, this thorny issue sees little sign of improvement. In fact, supporter data is even more segregated now than it was a decade ago as the number of communication channels online has exploded.

There are good reasons why these suite providers can't keep up: It's hard. Let's assume there are 10 channels that need to be connected to get to that coveted 360 degree view of your supporters.

It's appealing to think that the companies that have in place sufficient platforms to accommodate three of those 10 -- say CRM, fundraising and email -- are best positioned to add on the remaining big seven (Facebook, Twitter, Mobile, Google Ads, CMS, DRTV, Direct Mail).

Unfortunately, the reality is that legacy code and legacy clients make it impossible to keep up with the pace of change. The code may have been awesome five years ago, but it always ages poorly. Upgrades and integrations are agonizingly slow to push out and the increasing risk of change kills innovation.

So to get that 360 degree view, organizations need to hire data analysts and consultants just to get some sense of how programs are performing across all these channels and data silos.

The Cloud Changes Everything:

Meanwhile, thanks in large part to the "cloud", application development has exploded and there's no shortage of innovation in any given area from email to payment processing to event management to website management.

It has caused a major shift in the very nature of software development. While once the majority of applications were built in-house or by a vendor using a single code base that was then connected to the Internet, now software applications are mostly an elegant connection of existing services all tied together through APIs.

This change is not just faster and cheaper for software consumers, it is a fundamental difference in how to build and implement products. It presents a completely different set of challenges, but also an amazing amount of opportunity.

For nonprofits, never before has the case for best of breed applications been more compelling. Best of breed means using a specific software program or package for each specific business requirement. Cloud computing has made it financially and operationally viable for an organization to pick the very best application for every need. And, you no longer have to sacrifice functionality for the sake of integration.

Integration, Integration, Integration:

Not long ago, it was nearly impossible to make a variety of specialized apps peacefully co-exist and function as a cohesive solution.

The cloud, with its open, flexible application architecture means that integration is far easier and cheaper to manage now than it ever was before. As cloud computing has matured, it has given rise to the "API economy." Now, with the standardization of applications and APIs, you can easily connect different services. It's also possible to connect offline databases.

This dramatically weakens the principle reason that organizations were buying applications from the integrated suite vendors.

It also gives rise to a new kind of vendor: the Integrator. It's now your new vendor's job to show how they can integrate their product with your other systems; integration is no longer the IT department's shackles.

Real Cost-Savings:

In most cases, best of breed doesn't just mean the technology is better, it's also easier to use and cheaper!

If fact, it is becoming increasingly difficult to justify a suite purchase. The savviest nonprofits are always focused on reducing overall cost of ownership, which is just not possible with complex larger software providers.

With subscription-based pricing, costs of a cloud-based combination are usually lower and more aligned with actual demand. In most cases, consultants and long-term, expensive service agreements are no longer needed.

The New Challenges:

Let's imagine an organization has chosen ten (not unreasonable) best of breed cloud-based systems and still has a legacy database to maintain. Now, the issues lie in the areas of standardization, data integration, data flow, process flow, vendor management, and diverse and hard to transfer skill sets.

These are very different problems to solve than we were solving ten years ago.

How will my legacy system stay synced with my online systems?

How can we ensure we're not spending excessive time and money maintaining connections and managing updates?

How can we ensure we don't encounter a problem of "contact chaos."

How can we ensure that we're not spending hours/day migrating from one application to another -- never knowing who to call for support?

How can we manage the learning curve for each new application?

How can we know for sure our ROI of using multiple systems?

While these are all hard problems to solve, they are solvable now. For all the groups that desire choice, flexibility and freedom to create their own suite of best-in-class technologies from multiple vendors, the cloud is the answer and it's here now. Your organization can become nimble and responsive without technology has a hindrance, but as propeller .

When the latest thing from Silicon Valley emerges -- be it Vine or Instagram, you'll be ready to get up and running in hours or days, and test whether or not it helps you better engage with your audience.

Best of all, when all of your systems are integrated you have a never before seen view of your supporters and the ability to react in real-time. A nonprofit marketer's dream come true.