Digital transformation is more than an aspirational goal. It has the unprecedented potential to change the way people live and work—which is why it's so important for businesses to measure their digital maturity.
By accurately assessing the state of their digital transformation, businesses gain essential information about their readiness to function in the ever-expanding digital economy.
Understanding Digital Transformation
Digital products and services, along with the processes that create, enable, manage, and deliver them, have evolved to business imperatives in almost all industries and sectors.
According to estimates earlier this year by the World Economic Forum, digital transformation will unlock $100 trillion for business and, more broadly, for society over the next decade.
That's an astounding projection—one that begs business executives to take a hard look at their digital transformation efforts to make sure they're poised for success.
Assessing Digital Maturity
Because there are so many definitions of digital transformation, digital maturity is often an amorphous concept, assessed subjectively against the shifting backgrounds of whim and desire.
That's why you need to develop or leverage a methodology that evaluates a company's progress across five dimensions: experience, people, processes, technology, and data. These are the broad categories most likely to experience transformative change from the adoption and use of digital products and services.
Guided by a standardized series of questions, you can objectively determine whether you are leading or lagging in your transformation efforts. Create a scoring model (or leverage an existing one) that enables you to benchmark against your peers and better assess future investments.
The score also provides a framework for strategic initiatives. These should align with business outcomes and not the products and services a company may opt to buy.
The Dream Of Digital Transformation
By Google's reckoning, interest in digital transformation has soared in the past four years. Unfortunately, many digital transformations have stalled because of confusion, misperceptions, and lack of executive agreement.
Last year, Brian Solis, principal analyst at San Francisco-based Altimeter, concluded there is still very little digital maturity. "We're just not as far along as we think we are," he said.
Despite buzzwords including “omnichannel” and “seamless customer experience,” Solis said most companies are still operating in silos, without a clear strategy for digital transformation.
In practical application, we have found the concept of digital transformation varies widely depending on the definition being used.
One member of a corporate board or C-suite might define digital transformation as an investment in customer experience. But another might mean digital fueled improvements in operations or productivity, and a third might mean a complete re-engineering of the business model for digital.
Regardless, an organization needs to define the stages of its transformation, either by borrowing an existing method or coining its own. On top of those stages, it needs to embed the entry and exit criteria for each stage, as well as the optimal results or outcomes.
Obstacles To Digital Transformation
So why do digital transformation initiatives so often fail? The biggest stumbling block is a poorly articulated vision from senior leadership.
Unclear and undefined, this fuzzy vision and shapeless strategy opens gaps in the transformation initiative. As a result, each division, business unit, and geographic region interprets “transformation” to mean something different. Alignment is lost, leading to tangled and poor outcomes.
There are two other significant stumbling blocks:
- A lack of budget usually means that the definition and impact of the transformation at one level is different from the definition at the execution or cost level.
- Poor execution—internally and with selected partners—also creates chaos. Resulting from multiple issues, from the wrong vision to the slipshod planning, it devolves in people unprepared to execute correctly.
3-Step Digital Maturity Assessment Plan
Digitally mature organizations have powerful opportunities to predictably and repeatedly create results. This opens the door to myriad benefits—from the ability to execute on time and under budget to greater autonomy and recognition.
So how can an organization move toward digital maturity?
- Leadership must be able to clearly articulate a vision of the future.
- Select a maturity model to follow, then score yourself against it.
- Create a plan based on three-month increments.
The model isn’t going to prevent you from stating the wrong end goal or underestimating the time/resources it will take for you to complete the stages. But it will give you a clear map for your journey.