COVID-19 highlighted the importance of digital innovation for organizations to become ready for future challenges.
However, even before the pandemic, enterprises invested millions of dollars into digital transformation projects to maintain relevance in their niche, meet evolving customer needs, and plan for the future. However, the research suggests that:
- 70% of all digital transformation initiatives fail due to employee resistance and lack of support from management.
- Only 16% of employees said that their company’s digital transformation efforts improve their performance or are sustainable.
- Only 8% of global companies achieve their targeted business outcomes from their digital transformation investments.
Why?
Digital transformation is more than just adopting new software, technologies, and efficient business processes. It’s an innovative way of completing your core processes.
Organizations must confront complex digital transformation challenges before, during, and after the change implementation. To overcome these barriers, all organizations – from non-profits to enterprises – must first understand the concept of digital maturity.
What Is Digital Maturity?
Digital maturity is an organization’s ability to take advantage of the opportunities that new technology presents quickly. Digital maturity is a model that can predict digital transformation failure or success, as it focuses not only on an organization’s ability to implement new technology and software but also on its people, culture, processes, and so forth for a holistic approach to digitalization.
Digital maturity takes into account organizational health, including:
- Digital literacy across its workforce
- IT resources
- Culture
- Demographics
- Organizational structure
- Compliance and regulation
- Technology and software stack
- Employee learning and development initiatives
For example, the COVID-19 pandemic forced organizations to embrace digital changes such as remote work and digital selling for their survival.
- 63% of leaders state that they embraced digital transformation sooner than originally planned due to the COVID-19 pandemic.
- 43% of highly digital mature companies see significantly higher net profits than their industry averages.
What Is Digital Readiness?
Digital readiness describes an organization’s ability to undergo and adopt a software or technology transformation. In addition to considering whether or not the company can financially commit to digital transformation, it looks at how equipped the organization’s people, processes, and culture are.
Assessing digital readiness before transforming helps ensure the changes stick and have the desired impact.
The core components for an organization to assess its digital change readiness include:
- Technology infrastructure: An organization’s technological infrastructure refers to the software, hardware, and systems that enable operations. Because digital transformation requires major changes to the tools and applications an organization uses, ensuring the existing infrastructure can accommodate the desired change is critical.
- Digital literacy, competencies, and skills: Your team must be prepared for upcoming changes. Do they have the proper skills, literacy, and training to embrace digital transformation and innovation? And as those needs change and develop, they must be ready to continuously evolve to stay on top of new technologies and initiatives.
- Organizational culture: A digital-ready organizational culture embraces innovation and collaboration. To be digitally ready, your team must be centered around core values and beliefs and be on the same page about the goals and next steps for reaching the ideal outcome. Organizational culture also must foster an environment where experimentation is encouraged.
- Leadership and vision: Digital readiness starts at the top. When leaders are committed to the vision behind the recommended changes, it will be felt throughout the rest of the organization. Digital-ready leaders become champions for the transformation initiative and help keep the rest of the team motivated, focused, and moving forward.
- Data management: Data is critical to digital transformation. To be digital-ready, data management systems need to be in place to keep information secure, available, and accessible throughout the transition process. Analytics systems can provide data-driven insights to drive decision-making and keep transformation initiatives on track.
- Tie digital investments to customer needs: Digital initiatives should be guided by customers’ best interests. The changes you implement must bring more value to your end-users, whether by lowering costs, increasing team productivity, or improving customer connections. This means having a customer-centric approach is key to being digital-ready.
How Does Digital Maturity Influences Digital Transformation
Digital maturity drives digital transformation initiatives as it measures an organization’s preparedness to understand and adapt continuously to evolving customer demands created by ongoing technological change.
The companies with a higher (digital) maturity level get better business results since they benefit from their past investments and increased digitization, resulting in superior offerings, processes, vision, and culture.
Organizations with higher digital maturity realize 3x higher revenue growth than those with low maturity.
In addition to revenue, here are a few of the additional benefits of digital maturity:
- Higher Efficiency: Digital maturity leads to more efficient business processes. For example, insurance giant Guardian Life was able to cut costs and enable a more agile approach to change management by migrating more than 200 applications to the public cloud.
- Improved Product Quality: Digitization provides valuable data points for deriving actionable insights. For example, Rolls-Royce analyzes sensor data from the jet engines it produces to improve its fuel efficiency and increases safety by predicting upcoming repairs.
- Customer Satisfaction & Delight: Digital maturity goes a long way in delivering a unified customer experience to offer personalized recommendations.
- Employee Training & Engagement: Transformation initiatives often require reskilling and upskilling of employees to make them digitally savvy. Organizations explore different employee training methods to help their workforce explore alternative roles and growth paths offered across the firm.
Popular Digital Maturity Frameworks
A digital maturity model (DMM) is a framework used to assess a company’s current digital maturity level and provide a relevant roadmap to reach digital strategy goals, plan for growth, and measure success.
There are several digital maturity frameworks to choose from, but the three most commonly used frameworks are:
1. Digital Maturity Model by Google and the Boston Consulting Group
Google’s digital maturity framework has four stages that focus on marketing and sales efforts.
- Nascent: In the early stage of digital maturity, the focus is to improve data quality by connecting data silos across departments. It requires strong leadership buy-in and stakeholder engagement.
- Emerging: Once the departments are well connected, the focus is on improving experiences, deploying new technology, and developing scalable strategies.
- Connected: In the connected stage, organizations leverage data-driven processes to improve productivity, employ offline and online data to drive sales, and support shared goals across the company.
- Multi-Moment: In the final stage, organizations aim to optimize their operational efficiency across all the channels, including sales, marketing, and IT services. Additionally, they use data-driven insights for their decision-making process.
2. Deloitte’s Digital Maturity Model
Deloitte and TM forum introduced the first pan-organizational digital model, covering five core business dimensions with 28 sub-dimensions and 179 criteria to assess the digital maturity of organizations, track the progress of their goals, and make impactful investments on their transformation journey.
The five dimensions are:
- Customer
- Strategy
- Technology
- Operations
- Organization & Culture
The TM forum added data as the sixth dimension to evaluate an organization’s strategic and operational ability to ethically and effectively use data and information assets to maximize business value.
The digital maturity levels according to Deloitte’s survey are:
- Higher Maturity: Organizations scoring in the top 25%
- Medium Maturity: Organizations in the middle 54%
- Lower Maturity: Organizations in the bottom 21% of digital technologies
3. BCG’s Digital Acceleration Index
BCG’s Digital Acceleration Index (DAI) is a powerful diagnostic tool that allows companies to assess their digital capabilities and compare their digital performance with the industry average, peers, and best-in-class digital leaders.
It also assesses their digital readiness to become a bionic company by merging new technologies with human capabilities to power growth, innovation, efficiency, and resilience.
According to BCG’s model the digital maturity levels are:
- Bionic companies: DAI score from 67-100
- Digitally Proficient: DAI score from 44-66
- Digital Laggards: DAI score of less than or equal to 43
Companies leverage DAI in the following two ways:
- In their initial phase of digital transformation, organizations use DAI to benchmark their digital maturity in 42 categories, such as customer journeys, digital supply chain, and marketing personalization. This early benchmarking delivers an exponential value over the course of their transformation journey and allows them to track their progress.
- In combination with deep-dive assessments, companies also use DAI to benchmark their broad capabilities, such as new digital growth, GTM capabilities, and future-ready tech functions. This combination provides them a competitive advantage across multiple performance indicators, such as time to market, cost efficiency, product quality, and customer satisfaction.
Stages of Digital Maturity
There are different categorizations & terminologies used for digital maturity stages. However, the crux can be defined by the following four stages:
- Incidental: This is the entry stage and needs a strong foundation. However, most organizations arrive at the incidental stage due to a dire need to cope with technological disruptions.
- Intentional: In the intentional stage, organizations have a purpose and a well-thought digital strategy but are still looking to scale and automate their transformation initiative pan-organization.
- Integrated: Organizations operating at this stage are successfully integrating digital transformation models across multiple business areas in a streamlined fashion with buy-in from leadership.
- Optimized: Organizations in this stage are digitally mature and considered for digital transformation benchmarking. They have a robust digital transformation strategy with streamlined and automated processes. Any new technology added to the organization is easily integrated into the existing tech stack and processes. Digital transformation is at the core of org culture, leading to organizational agility as technology and markets shift.
Digital Maturity Challenges That Impact Readiness
Not all organizations are set up for digitalization success. Digital maturity is a spectrum, and enterprises must first address aspects of their digital maturity levels before tackling digital transformation.
Here are six major digital maturity challenges that enterprises face when implementing an organizational-wide digitization initiative:
1. Decentralized organizations have siloed teams and software redundancy
Large organizations typically have a decentralized organizational structure, meaning decision-making has been shifted to lower levels, allowing global companies to have multiple sales, marketing, and customer support departments for each country and region in which they have a footprint.
This leads to siloed teams spread across a company, which presents a huge challenge to digitization efforts, including communication barriers, lack of collaboration, no knowledge sharing, and software redundancy.
This leads to siloed teams spread across a company, which presents a huge challenge to digitalization efforts, including communication barriers, lack of collaboration, no knowledge sharing, and software redundancy.
2. Digital literacy and skills vary across large workforces
Many enterprise organizations – especially in non-technical industries such as insurance, non-profit, and construction – have a wide range of digital-literate employees.
While certain, more tech-focused departments may have the digital skills required to handle digital transformation efforts (IT, marketing), less-tech focused departments (sales, HR, finance, operations, customer support) will need to have personalized reskilling and upskilling training to obtain the basic digital skills needed to perform their day-to-day in a new, digital environment.
Therefore, a one-size-fits-all upskilling program will not be effective.
3. Loss of productivity while employees learn new digital applications and processes
Reskilling and upskilling won’t happen overnight, and it needs to be an ongoing process. However, organizations don’t have the flexibility to shut down operations while training and onboarding employees on new tools and processes.
Organizations must leverage digital adoption platforms such as Whatfix to help their employees learn in the flow of work with intuitive features like contextual-in-app guidance and multi-format self-help content to bring them to speed.
4. Digital needs for large organizations are highly custom, leading to complex applications with steep learning curves
Due to custom-needs and security concerns, many organizations have complex, customized software. This presents two challenges for modernizing legacy applications:
- Integrating custom applications with existing and new software applications. IT departments must spend extra time creating, launching, and maintaining this digital data ecosystem.
- Creating a contextually-relevant training and onboarding program for potentially an application only used at your organization. For many companies, this also means a steep learning curve for end-users and a lack of online support documentation.
5. Outdated internal support processes for employee issues
For many large companies, internal support is also outdated and needs digitalization. Companies leverage internal IT departments to handle application queries and internal support issues. In the case of new software implementation, tickets skyrocket, leading to either overwhelmed support teams or going over budget by bringing in temporary IT support agents.
The longer employees wait for answers to their issues, the more frustrated they become, which leads to low adoption of new technologies, with employees reverting to older habits.
6. Internal resistance to change
Don’t forget about your people – culture is a massive measurement of organizational maturity. Some of your employees may have used the legacy systems and processes for a long time and will be resistant to change. For siloed organizations, these people may feel underheard and feel that they have an existential threat to their current role.
While this may not seem as daunting as the other challenges on this list, the difference between internal resistance to change vs. acceptance and evangelism will go a long way in ensuring digital transformation success.
How to Accelerate Your Organization’s Digital Maturity
Don’t forget about your people – culture is a massive measurement of organizational maturity. Some of your employees may have used the legacy systems and processes for a long time and will be resistant to change. For siloed organizations, these people may feel underheard and feel that they have an existential threat to their current role.
While this may not seem as daunting as the other challenges on this list, the difference between internal resistance to change vs. acceptance and evangelism will go a long way in ensuring digital transformation success.
1. Leverage digital maturity models for strategic insights
Digital maturity models can be used to measure a company’s current level of digital maturity. Based on these frameworks, the company can see what steps it needs to take to reach its maturity goals. There are multiple digital maturity models against which to measure.
Leveraging a few of these models can help identify strategic areas of improvement. Insights gathered from these DMMs can be used to set direction, provide benchmarks, and help save time, money, and other resources.
2. Implement agile and lean approaches to process transformation
Agile and lean methodologies focus on improving operational flow and minimizing waste. They aim to be flexible and adaptable and prioritize continuous improvement. Implementing these methodologies can help move processes and projects forward, bringing you closer to reaching digital readiness faster.
But keep in mind that both of these practices require setup, training, and upkeep. Adopting and implementing these methodologies should be seen as a long-term commitment, not just a short-term practice to bring you closer to a goal.
3. Enhance digital skills and literacy at all levels
Providing digital skills and literacy training to employees of all levels can bring the entire team one step closer to digital readiness. While some teams, departments, or individuals may need specialized training based on how their specific roles are changing, introduction-level or beginner skills training can go a long way in getting your team prepared to adopt changes.
As your team starts to become more confident in their digital skills, you can begin to build upon them and introduce additional training resources.
4. Use a digital adoption platform to address skill gaps
Technology can help you fill critical gaps preventing you from achieving digital readiness. Relying on tools to help skill, train, and educate your team allows you to automate some of the processes and move forward more efficiently.
Implementing a digital adoption platform is your best bet to achieving digital readiness. DAP enables end-users with in-app guidance and support. This approach allows users to learn how to use new tools or software as they go, providing a personalized training experience that sticks.
With a tool like Whatfix DAP, enable your technology end-users with in-app guidance to accelerate time-to-proficiency and provide just-in-time support for infrequently done or complex tasks.
5. Take a data-driven apporach to making decisions
Using data to make decisions can bring strategy into decision-making. When you use data to back up your choices, each initiative can bring you closer to achieving digital readiness — without wasting time and resources on trial and error or guessing what will work.
Data can fuel decisions across your entire organization, from training insights to key transformation initiatives.
The Critical Role of Digital Adoption
Digital adoption is the process of learning how to use new technology in order to take advantage of its full potential. This is critical to the success of digital transformation efforts – and digital adoption is embedded as an underlying challenge throughout the digital maturity model.
Digital adoption platforms are your one-stop solution to solve digital maturity challenges. Whatfix overlays on top of software applications, providing interactive walkthroughs for employees as they navigate through their digital technologies.
Whatfix offers in-app training and support content such as:
- Product tours
- Guided workflows
- Onboarding task lists
- Smart tips
- Beacons
- Modal windows
- Compliance alerts
- Self-help wikis
- Feedback surveys
DAPs are no-code applications to support change leaders and L&D professionals. These applications also provide organizations with behavioral analytics, allowing them to understand how new and existing software is being used, what areas of these tools need additional training, and apply feedback from employees to improve application onboarding and support.
Solve Digital Maturity Challenges By Empowering End-Users With a Digital Adoption Platform
Digital maturity directly impacts your operational efficiency and revenue. It is critical to evaluate your digital maturity stage and develop a digital transformation roadmap that drives business growth while reducing your expenditures.
Leveraging digital adoption platforms can drive your transformation initiatives successfully. Whatfix empowers both employees and organizations to become digitally proficient, allowing them to find the most value from the applications and digital process. This will enable organizations to find the true ROI of their digital transformation investments and successfully hit their digitalization goals.
Book a demo with our experts to discover how Whatfix can help you become a digitally mature organization.
