Digital transformation. It’s a buzzword we often hear, and yet to many companies, the concept remains something of a mystery. There is often a lack of clarity over what this kind of transformation translates to in real terms, and this can cause companies a great deal of anxiety and frustration.
According to a recent study, industries are on average less than 40% digitized, with relatively few organizations having reached the levels of flexibility, process automation, streamlined technology, and data analysis exemplified by a fully digitized company. But here’s the problem: commercial pressures arising from digitization are continuing to rise. Companies that do nothing to improve their digital capabilities can now expect to see a 6% reduction in revenue.
Proof that companies are still struggling to adapt comes in a 2017 report from MIT Sloan, which revealed that only 25% of companies would rate themselves as ‘digitally mature’. This would indicate that the majority of companies are at risk of revenue loss, so digital transformation is becoming a more and more critical part of remaining competitive.
What exactly is ‘digital maturity’?
Digital maturity can be difficult to define, but fundamentally, it is about how well your organization is positioned to make use of, and adapt within, an evolving environment of digital enablers, in order to drive long-term value for the organization.
How do you digitally transform a company?
‘Digital Transformation’ means a lot of different things to different people. Depending on to whom you speak, the use of the term can encompass a multitude of fields, from tactical to strategic.
On the tactical side, it can be used to describe the need to put a specific technology or set of capabilities in place. While such activity may be useful in the short term, it doesn’t necessarily take into consideration how well the organization is positioned to put different capabilities in place in response to future demands and changes. In short, it doesn’t do you much good for your long-term success, and is not a full digital transformation.
On the other end of the spectrum is the strategic way of thinking about digital transformation, and the type we specifically focus on. This is a more holistic approach, as it aims to increase your organization’s level of digital maturity through a transformational effort that goes beyond a single implementation. This helps prepare your organization to excel within tomorrow’s marketplace.
How to increase your digital maturity
True digitization is much more than just introducing technology. At Aspirant, we measure digital maturity across seven different dimensions:
1. Leadership & Sponsorship: Digital ideation and experimentation are encouraged and supported from the top. And this means looking at failures that you can learn from in a different light than what most organizations are comfortable with.
2. Vision & Strategy: A clear vision and digital strategy are articulated and support and/or are part of the overall business strategy
3. Culture & Organization: Risk-taking and cross-functional collaboration are encouraged, and supported through the correct structures and incentives.
4. Resources & Capabilities: A good mix of business and technical skills is recommended for this kind of transformation. This can either be external or internal, in which case your people need to have or acquire the necessary skills, knowledge, and creativity. In both cases, leadership needs to ensure that expert advice is sought, heard, and respected.
5. Tools & Technology: Enabling technologies need to be chosen based on your strategic goals, and should be flexible to change. Where possible, automation (e.g. testing) should be set up, as well as continuous build and deployment. Crucially, new technologies you employ should be layered on a strong operational foundation.
6. Process & Methodology: The organization needs to have well understood and mapped out value streams, and processes need to be put in place for prioritizing and scheduling work.
7. Insights & Innovation: Data analytics capabilities are imperative for any organization doing business in the modern world. You need to have a sound data foundation, be data-driven, and, where insights are gained, you need to be in the position to action those insights.
We developed these dimensions using our own experience, and after having researched many of the maturity models currently available. We found many of these models to be either too complex or too simplistic to provide good insight into the areas on which companies should focus, so we created Aspirant’s Digital Maturity Model. By evaluating your organization across these seven dimensions, the initiatives and capabilities required to increase your digital maturity to the level appropriate for your organization can be identified.
Digitization is not just about the tech
You’ll notice that only one of the seven dimensions is focused on technology, whereas three of them deal directly with people. The undeniable truth is that the success of any transformation, digital or otherwise, is a cultural change exercise, highly dependent on the human factor. The human cost of change is a vital consideration.
Why do it?
Striving for a digitally mature organization comes with challenges, but it is a journey worth taking. As well as streamlining and simplifying your ways of working, increasing your organization’s digital maturity has the potential to bring you great value in the form of increasing your organization’s business agility, and with the right Digital Strategy, potentially enabling new revenue streams. It could also increase both customer satisfaction and employee engagement. The most important thing to remember is that, before you begin, the seven dimensions of your transformation should be taken into consideration, so that you set yourself on the best possible path for success.
To find out where your organization lies along the Digital Maturity continuum, or to learn how your company can increase its digital maturity and business agility through a Digital Transformation, contact David Carrico at email@example.com or by calling Aspirant at 724-655-4441.