After a leap from legacy business to a digitally transformed business, it is imperative to evolve as a digitally mature organization to compete with the nimbler competitors. While digital transformation enables you to rethink your existing business operations, digital maturity enables you to evolve and thrive amidst the changing digital landscape.
Let me ask you simple questions, to help you retrospect your business.
Is your business doing digital or being digital?
In an era where the “Digital First” approach is table stakes for survival, being “Digital Savvy” is imperative to thrive. It is no longer just about using digital products; it is about being digital to the core.
Is your business continuously evolving?
If your business embraces innovation (with ethical guardrails), cultivates strong culture, matches the pace of market, and provides an ecosystem to explore and learn, your business is certainly evolving.
Having answered these questions, you will now be able to evaluate your business in terms of maturity. But before evaluation, lets delve deeper into the concept of digital maturity.
What is Digital Maturity?
Digital Maturity compels you to look beyond technology, towards cultivating culture and shaping the digital future. The digital maturity concept pillars on two distinct but related things — digital intensity and transformation management intensity. While digital intensity refers to the level of investments towards technology-enabled initiatives, transformation management intensity signifies the investments to create digital transformation within a business. While the former emphasizes on evolving the business operations, the latter accentuates on the vision to shape a new future through governance and engagement.
The Four Levels of Digital Maturity
Based on the above concepts, you can now begin evaluating and analyzing where your business currently stands in the digital maturity race.
There are typically four levels of digitally maturing businesses:
Level 1: Digital Beginners – These businesses have very narrow advanced digital capabilities, although they might be matured with traditional applications. They are unaware of the opportunities and make small investments without actual transformation management.
Level 2: Digital fashionistas – They experiment with many appealing digital applications, some of which may create value, but most do not. Their overall business efforts guise motivation, but lack in vision, strategy, and real knowledge.
Level 3: Digital Conservatives – They favor wisdom over innovation. They understand the need for a strong uniting vision, governance, and business culture to ensure investments are managed well. But, spending wisely through careful approach and avoiding risks, makes them lose some valuable opportunities.
Level 4: Digirati – These businesses accurately understand how to drive value with digital transformation by transformative vision, careful governance, engagement, investment in new opportunities by taking calculative risks and implementing continuous advancements.
Which level does your business fall in?
8 Steps to achieve Digital Maturity
No matter which level your business currently falls in, you can always take your business to the next level. Below is a step-by-step guide to help your business achieve Digital Maturity.
Step 1: Make digital core to your business
Implementing digital talent skills in the entire organization with a customer-first mindset, collaboration, and design thinking is the first step towards Digital maturity. Start looking your business through a digital lens to find where digital technology and skills can be embraced.
Not technology, but talent and culture are key drivers of digital success.
Step 2: Develop strategy at an initial stage
Strategy is the strongest trait of a digitally matured business. Developing a clear and coherent digital strategy at an early stage of digital transformation is essential to achieve digital maturity later. Start preparing your business to consistently adapt to the ongoing digital change.
Step 3: Plan with time horizons of five years or more
Creating an effective approach while considering your overall business objectives and the time horizons beyond 5 years is yet another crucial step towards digital maturity. To play the long game, start looking at your business strategies and goals with a broad time horizon.
Step 4: Adopt digital innovation, more than just experimentation
What often sets digitally matured businesses apart is their ability to upgrade digital experiments. Start considering the evolving technologies and market trends as an opportunity to reimagine your business operations and bring more value to your business.
Step 5: Implement cross-functional collaboration
Breaking down functional silos and focusing on cross-functional collaboration is the key to digital maturity success. Start implementing cross-functional teams to empower new mindsets and working styles, therefore reinforcing innovation, company culture and agility.
It’s just more difficult to think about any function in isolation because the processes are becoming so integrated. The opportunity for integration and collaboration is so great that it drives greater effectiveness and efficiency. – David Cotteleer at Harley-Davidson.
Step 6: Cultivate a collaborative and risk-tolerant digital culture
Overcoming aversion to risk is perhaps the most important characteristic of digitally maturing culture. Start cultivating a strong culture that encourages risk taking, teamwork, agility, and continuous learning.
Step 7: Create an environment that enables digital maturity
Start investing to create an environment for employees that is far beyond training, where employees can continuously learn, gain digital experiences, and grow.
Step 8: Implement commitment and leadership
Digital maturity does not develop accidentally, it is achieved through commitment, investment, and management. Start determining realistic priorities through commitment and leadership to expedite digital maturity.
75% of businesses who commit sufficient time, energy, and resources to digital endeavors say these efforts are successful.
The Financial Advantage
Let us understand the economic advantages of achieving digital maturity at various levels.
The businesses that are mature on the digital intensity are better at driving profits through their prevailing assets while those mature on the transformation management intensity tend to be more rewarding.
Based on revenue per employee and fixed asset income, the digital fashionista and digirati businesses increase average business performance by 6-9%. Being matured in both dimensions, digirati businesses outperform on multiple financial measures. Digital fashionistas, strong on digital intensity, drives 16% more revenue through their workforce and physical assets than digital conservatives do. On an average, digital conservatives and digirati are 9% to 26% more profitable based on the net profit margin than their competitors. For these businesses, strong vision, and power help to align investments along a mutual goal.
Digital beginners are several years from achieving the digital maturity level that their digirati competitors already have.
Great things are not done by impulse, but a series of small things brought together – Vincent Van Gogh
While you cannot make your business digitally mature overnight, you can always start your journey by taking small steps like encouraging innovation, cultivating digitally-minded culture, planning strategies with longer horizons, adapting to the market changes, and scaling small digital experiments into big initiatives to impact the overall business.
Words to the Wise
The time to digitally mature is now. You can only have complete knowledge of what digital maturity is for your business once you start working towards it.
Reference: MITSloan Research “The Advantages of Digital Maturity” – https://sloanreview.mit.edu/article/the-advantages-of-digital-maturity