What Is Digital Maturity and Why Is It Important to Your Company’s Growth?

20 Feb, 2023

Digital_Transformation

Traditional businesses focused on tracking employees, enforcing rules, and ensuring compliance. This process has evolved significantly. By employing the digital model, companies can maximize business results and optimize workforce productivity. To accomplish this, organizations must prioritize reaching digital maturity.

Let’s look at what we mean by digital maturity, how it’s measured, and why it’s important to your company.

What Is Digital Maturity?

Digital maturity refers to the extent an organization has adopted and integrated digital technologies and processes into its business operations and culture. A digitally maturing organization effectively leverage digital technologies to align their business strategy, culture, technology, innovation, improve efficiency, and continuously meet digital expectation of customers, employees, and partners.

Digital maturity isn’t a “you-have-it-or-you-don’t” concept. Companies may be digitally mature in some facets of their operations, and lacking maturity in others. For example, an organization may be quite digitally mature regarding its customers while not mature at all in its innovation processes.

How Is Digital Maturity Measured?

Since digital maturity impacts just about every corner of an organization, there’s more than one component that goes into measuring it. Companies can evaluate their digital maturity in numerous ways, like:

• The digital technologies investment level
• The customer-centric activities available
• The degree of automation in business processes
• The extent of digital literacy among employees
• The use of data analytics to inform decision-making
• The degree of innovation in the company

Accurately measuring digital maturity is essential for building and reaching digital transformation. There 5 main dimensions that need to be evaluated to understand and create a holistic view of the company. There are sub areas under each dimension that areas a company needs to measure.

Five Dimensions of the Digital Maturity

1. Customer-Centricity: How customers engage, experience, and feel about the brand
2. Business Processes/Operations: How are the business processes managed, automated, integrated for efficiencies, easy of use, insights driven, and agile
3. Technology: How business applications, data, insights, global architecture, technical debt, network, security, and governance managed for growth and agility of the company
4. Strategy: How is the company’s digital transformation align with their brand, budget, market, innovation
5. Company & Culture: What is the leadership involvement in the transformation, culture of the company, structure of the company, and governance practices.

Companies can aspire to reach Level 5 of digital maturity. Establishing a baseline is crucial to the journey. Let’s look at the defining aspects of each level.

Level 0: Chaotic
This stage is ground zero for any company. There’s no strategy, few goals, sparse data, and limited tools in place to facilitate organizational processes. Most processes are handled manually, with most employees working in silos. The company handles issues as they hit with no proactive planning.

Level 1: Reactive
There are still only a few processes in place at this level. There may be a few tools available to employees but little strategy for using them. In addition, the customer journey is most likely disjointed, and manual ways of doing things are still how most tasks get completed. Leadership only adds innovation when the market demands it.

Level 2: Limited
At this level, leadership is becoming aware of the gaps and some of the process needs, but innovation is still focused mostly on a case-by-case basis. Portions of the customer experience are digitized, and some basic automation has been added to operations.

Level 3: Efficient
This is the stage where organizations have integrated many of their processes and standardized their operations across departments. They have key performance indicators (KPIs) in place and strive for a top-down digital experience. Innovation is present, but not all-encompassing.

Level 4: Predictive
Companies at Level 4 are functioning with well-optimized operations. Teams are interconnected with strategies and processes are aligned with business outcomes. It is a data-driven organization, with innovation driving the digital experience.

Level 5: Future-Ready
This is the top stage of digital maturity. With an agile, proactive company culture, the initiatives forge a digital-first strategy of process excellence. There’s widespread automation, a frictionless CX, and leaders are disruptive users of digital technology. Consistently measuring and adjusting company performance is deeply embedded in the fabric of the culture.

Why Is Digital Maturity Important to Your Company?

• Increased Efficiency: Digital maturity help enable companies to streamline processes, eliminate/minimize manual efforts by automating processes and tasks, streamlining workflows. This would lead in improved efficiency and productivity.
• Enhance Customer Experience: Digital maturity enable companies to enhance customer experiences by leveraging digital technologies and channels to provide a more personalized, efficient, and convenient experience. This can lead to an increased customer satisfaction, loyalty, and revenue.
• Improved Agility: Digital maturity can enable organizations to be more agile and responsive to changing market and customer needs. This can help organizations stay ahead of the competition and seize new opportunities.
• Reduce Costs: Digital maturity can enable companies to reduce costs through automation, process optimization, and better resource allocation. This can help organizations achieve better financial performance and profitability.
• Innovation: Digital maturity help companies foster a culture of innovation and experimentation, enabling companies to introduce new products and services, explore new business models, pioneer new markets, and help companies to differentiate from competitors.
• Attract and Retain Talent: Digital maturity can help companies to be an attractive place to work by providing employees purpose, modern tools, flexible work arrangements, and a culture of innovation. This culture helps companies to attract and retain top talent.
• Better and Quick Decision Making: Digital maturity can provide companies with powerful and real-time data and insights to support decision-making faster, effective, and consistent.
• Risk Mitigation: Digital maturity can help companies to mitigate risks related to cybersecurity, compliance, and data privacy. This helps for better deliver their services and protect reputation and assets.

Companies focused on improving their levels of digital maturity must collect the information, coordinate it, and execute the results before moving forward toward the next level. By recognizing and understanding the importance of digital maturity and its role in business success, organizations can take the necessary steps to transform their operations to achieve higher levels. The efforts will be worth it in terms of a higher-performing, better-aligned, and more cohesive company.

Do you want to learn more about how you can get started on your company’s digital maturity.
Engage with our Digital Transformation Specialist today!