What’s in your DMA—or the secrets to your digital transformation success
What's digital maturity and why's it important?
Digital maturity is a process. It describes how your organization learns to respond appropriately to the emerging digital competitive environment. You can think of it like a sliding scale of progress. It measures your relative position in comparison with your competitors, suppliers, and clients when it comes to digital capabilities, as well as the broader ecosystem of digital evolution in society.
Keep in mind that digital maturity is not just a measure of how much technology you employ. It requires understanding many related facets that involve people, systems, and procedures.
While some digital initiatives generate value, others don't. As we've seen all too often, a poorly conceived program of digital change is likely only to disrupt people and erode business value. There's a sequential order in which capabilities, systems, and practices need to evolve to optimize the speed of change and success rate of digital transformations and their resulting return on investment (ROI).
An honest DMA ensures high value areas are targeted and the route to a digital future is logically defined. It analyses the business, creates organizational visibility, and helps map the digital evolution journey in a rapidly changing ecosystem. Finally, it ensures that the digital evolution can be easily communicated and measured once the journey has begun.
How to conduct a DMA
Digital capability can be evaluated across four key areas: systems design and architecture, information and data definitions, business process codification (as opposed to ad hoc practices), and the use of key performance indicators.
Capabilities in these four areas can then be assessed against a set of models—or core business domains—to help contextualize the current digital maturity of the business.
The result maps capabilities to core business domains to both define and benchmark digital maturity. The insights identify critical gaps, areas for improvement, and where the best opportunities are to maximize ROI. These insights allow businesses to understand the inner workings of their own digital capabilities as well as discover how they measure up to competitors, suppliers, clients, and the broader digital evolution ecosystem.
Figure 1: The core business domains of a DMA
Creating value through the evolutionary phases of digital maturity
The digital maturity spectrum is underpinned by three distinct evolutionary phases:
- Value Retention – Fixing the foundation
This phase involves building on the foundation and further developing existing digital capabilities that have emerged across all areas of the business. This is achieved by exposing, connecting, and amplifying existing initiatives to reduce costs and time to value.
- Value Identification – Mapping the future
This phase involves taking the time to chart the course to becoming a digitally mature organization with the insights gained from the first phase. It allows all stakeholders to participate, influence the route taken, and be part of the journey.
- Value Capture – Bringing the vision to life
With the foundation established and the journey mapped, the business can now take control of the pace of change and the desired direction of progress.
Figure 2: Three distinct evolutionary phases of value creation
As digital maturity progresses, business leaders must be honest with themselves about the extent to which their organizations possess all the necessary resources to move forward. To maximize digital potential, businesses will need to cultivate a diverse ecosystem of internal teams, partners, suppliers, and customers who are engaged in innovative, collaborative ways.
Aim for sustainable change
One of the most important principles to acknowledge is that sustainable change comes from a series of incremental steps; an evolution in the way the business operates. Most of the time, “big bang” transformations fail because the transition from the current state to the future state is too extreme. Employing deep domain knowledge and mature methodologies support the development of a practical, achievable journey to evolve your business to the next level of digital maturity.
About the author
Michael Grady
Advisor, Digital
Michael has over twenty years of experience in the global resources industry. He has a breadth of expertise including engineering and project management experience across a broad range of industries and more recently providing management consulting guidance to some of the world’s largest natural resources companies. Michael’s functional expertise includes development of innovative business strategies and operating models, requirement definitions, data management, and system implementation.