Social enterprises (SEs) measure success in two ways. The first is by generating economic gains. The second is by driving a positive impact in the community. How a social business understands, tracks, and reports their impact can make or break their growth. The right tools and frameworks for impact management and measurement (IMM) are critical to social enterprise growth. It’s a challenge to manage their impact and integrate this information with operational and financial data. Here are 5 social enterprise challenges that hinder social enterprise growth.
- Social enterprise ignoring impact
- Social enterprise maintaining decentralized data
- Social enterprise not engaging funders
- Social enterprise not telling the whole story
- Social enterprise overspending on technology solutions
Management of Impact along with unified data from operational/financial systems is critical to drive and demonstrate social enterprise growth.
Social Enterprise Challenges
1. Social enterprise ignoring impact
Every business makes an impact. From creating jobs to innovative products and services, businesses are enmeshed in our daily lives. Global crises like the COVID-19 pandemic and the climate crisis have shown that businesses directly affect people and the environment.
Companies are increasingly adopting environmental, social, and good governance (ESG) standards. Corporate and social responsibility (CSR) models, social value frameworks, and other principles align business practices with impact on people’s lives.
Improved public image, brand differentiation, greater engagement, and more serve to generate business value. Businesses can no longer afford to ignore a social purpose or demonstrate their impact on society. Today, all businesses have an impact element to measure.
2. Social enterprise maintaining decentralized data
Good data can drive social enterprise growth. Many mission-driven organizations have data all over the place. Data can sit in various systems like:
- Donor or case management systems
- CRM and marketing systems
- Volunteer or loan management systems
- Payment processing systems
The average enterprise is running 464 different applications to manage day-to-day business functions. With decentralized data, the organization can’t have a clear picture of their activities or relationships. Merging data into a single, impact-driven platform puts SE-specific technology to work for you, saving time and money.
Read More: Theory Behind Social Impact Experiments
3. Social enterprise not engaging funders
Social enterprise growth also depends on investment. Investors and funders want clear data that demonstrates your organization's impact. The current SE norm is to provide time-consuming annual or semi-annual reports.
Social impact consulting leverages tech to create at-a-glance, on-demand reports specifically aimed at funders. An enterprise dashboard also provides a bird’s-eye-view of your social business goals and performance. This visual reporting system integrates social impact measurement, operational, and financial dashboards for up-to-the-minute data. The right technology allows you to communicate with ease to your funders rather than waiting on data cycles.
Read More: Impact Accelerators For Social Enterprises
4. Social enterprise not telling the whole story
Organizations that have incomplete data, rely on output data, or rely on qualitative data, are not conveying the full impact of their work. These organizations are also not understanding their full relationship with the stakeholders they serve.
A good enterprise dashboard is critical to effective communication both internally and externally. Comprehensive impact data allows you to communicate outcomes with management, executives, and board members. IMM is not about proving, but about learning. It’s about seeing successes and challenges in real-time, adapting, and maximizing impact.
Externally, organizations with effective IMM can create strong public-facing communication. Using data that is compelling and convincing is a huge advantage to explain the social, economic, and environmental impact of your work.
5. Social enterprise overspending on technology solutions
Social enterprises often struggle with a number of challenges when trying to interpret data from multiple sources. They deal with challenges such as:
- Data manipulation (entry, clean up, translation)
- Calculations like scoring
- Data unification
- Integration from different sources
As the level of data calculation, integration, and unification increases, it gets costly in terms of technology and expertise. Visualization platforms like Tableau and PowerBI can help, but they often require tech support. Social Enterprises need to contract with data scientists or software engineers to merge pipelines and build custom dashboards.
Tools like Tableau can be cost-prohibitive when it comes to per-user pricing. If you have 10 people in your organization plus a cadre of volunteers, multiple users need to access the system. Alternatively, the whole office tries to share one user log-in, creating bottlenecks and single points of error. The right kind of technology can grow your social enterprise without wasting resources.
The sustainable social enterprise Approach
Having united data is one of the most efficient ways to drive and demonstrate social enterprise growth. Impact management and measurement goes hand-in-hand with other business data on centralized dashboards. These tools allow you to make smart, data-based decisions and understand the value you’re creating for the stakeholders you serve. Social enterprises can’t budget for high-ticket technology solutions every few years. For long-term cloud-based solutions that follow the unified approach for social enterprise growth, contact Sopact.