The importance of digital maturity in successful digital transformation

Digital transformation is an on-going way to approach and determine an organization’s ability to stay relevant in our digital world. Your organization’s level of digital maturity will play a critical role in your ability to successfully undertake and sustain digital transformation initiatives. Digital maturity encompasses five components that help organizations determine their ability to grow, change, compete and enable their employees and customers in new ways: digital strategy, technology, data, process and culture/organization.

Digital maturity components

Each of these five components consists of sub-categories that define the established capabilities necessary for your organization to achieve your digital transformation goals. The process of digital transformation is the journey of progressing these different dimensions along a maturity scale so that your organization can gauge its level of digital competency and determine where value opportunities exist. The higher an organization can increase its digital maturity, the stronger the capacity will be to self-sustain further digital transformation and innovation.

Digital maturity is not just about technology, your organization needs to be assessing its capabilities across all five components as each one will play an important role in your success. For example, if your organization isn’t fully aligned with the change, lacks a strong culture or doesn't have people in the right roles, resistance will arise, and progress will be blocked – even if you have standardized processes or a strong strategic vision.

All these components work together:

• Digital strategy ensures you’ve got alignment across the organization, so that your digital transformation initiative aligns with your company’s focus, whether it's on growth, expense reduction, etc.
• Technology is part of staying relevant, whether it's moving to the cloud, using AI or implementing new systems that support your business better
• Data is necessary for real-time analysis of your business, allowing you to make data-driven decisions as you progress through your digital transformation goals
• Processes are essential from an operational standpoint, ensuring your company operates correctly and uses technology to automate tasks
• Culture and organization put a dedicated focus on your people, ensuing their ready and willing to support incoming changes

The end goal does not need to be achieving full digital maturity as it is not to be perfect. Your organization may be more mature in some areas than in others. When undertaking digital transformation initiatives, it’s important to focus attention on components with a lower digital maturity and improve the sub-component areas to ensure they’re solid enough to successfully achieve your end goals.

Digital maturity levels

As your organization progresses, they will move through the five levels of digital maturity: initial, emerging, defined, managed and optimized. At the lower levels, organizations will encounter more challenges and roadblocks throughout the five components when executing digital transformation initiatives – decreasing as they progress up the scale.

An organization operating in the initial range could face challenges with department alignment on digital initiatives, disparate and conflicting data, difficulty attracting and retaining talent or a resistance to change.

Your specific organizational challenges will be entirely dependent on your digital maturity level in each of the five components. As you move up the scale, organizations will start to see employees that pride themselves in the culture and are actively engaged, high leadership involvement in planning digital initiatives, access to a centralized data source allowing for data-driven decision making and digitally enabled or even automated processes – all of which will allow an organization to succeed in and continue to sustain digital transformation.

Example challenge

To better understand how your digital maturity affects digital transformation success, imagine an organization has robust data processes in place, meaning they have efficient systems for collecting, storing and analyzing data. However, if culture and organization component is not equally mature, this can lead to significant challenges. For instance, without a supportive culture, employees may resist adopting new data-driven practices, leading to poor implementation and utilization of the data systems. Without leadership, initiatives may lack the necessary backing to succeed.

Additionally, a weak organizational structure can hinder collaboration and communication, causing delays and misunderstandings. The employee and customer experience can suffer as a result, with employees feeling disengaged and customers not receiving the full benefits of the company's data capabilities. Ultimately, the company will waste time and resources fighting against internal resistance and misalignment, stalling progress and diminishing the potential impact of their data processes.

Another example could be seen with an organization that has a comprehensive data dictionary – meaning they have a well-documented and organized set of data definitions and standards. However, if the organization is not using this data to drive decisions, they are missing out on a critical advantage. Without leveraging their data, the organization may rely on intuition or outdated information, leading to suboptimal decisions. This could result in missing opportunities to identify market trends, optimize supply chains or enhance customer experiences. By integrating data-driven decision making into their operations, the organization can make more informed choices, respond quickly to changes and gain a competitive edge in their industry.

How we can help

Understanding your organization's level of digital competency is crucial for undertaking successful digital transformation initiatives. Baker Tilly’s digital strategy team can walk you through our digital maturity survey that can help you understand and improve your competency in each of the five components and ensure you can sustain your digital transformation initiatives and continue to thrive in our digital world.