How to Measure Your Organization’s Digital Maturity
By Waqqas Mahmood, Director, Strategic Consulting, Marcum Technology
As digital advisors, the most common question we get from business leaders is how they can measure their organization’s digital maturity. The answer is multi-faceted, and it goes beyond technology. Digital disruption is a clear and present threat to firms that don’t transform. Leaders must embed digital capabilities into the very heart of their business and make digital a core competency, not a bolt-on.
But where do you focus your efforts as your firm matures, and how do you know you are on the right track? Marcum Technology advises clients to look at four key areas: culture, organization, insights, and technology.
It’s important to create a culture that celebrates failure and encourages employees to prototype new solutions, rather than reprimanding people for trying something different. Marcum asks clients to consider how dependent they are on digital to stay competitive. If they find that they’re very dependent on technology, it typically means digital capabilities are a key ingredient in the company’s overall strategy and warrant attention from the CEO and the board of directors. In order to establish the right culture and create a forward-thinking organization, we advise clients to have the appropriate leadership in place. Digital natives and leaders who have been in the innovation space with battle cards can really make a positive impact on the organization.
The last component of a strong culture is communication. How well an organization communicates its digital vision as an integrated part of its overall strategy shows that digital enablement is there to stay.
When asked for advice, we look at how an organization is structured and whether customer journeys are prioritized over functional silos. Deploying appropriate resources in the areas of digital strategy, governance, and execution shows that digital enablement is baked into the organization. We recently worked with a client to implement a “digital center of excellence” approach to digital transformation, which involves creating a federated-at-scale operating model for organizational support and growth for digital capabilities. This provided the client with in-house digital capabilities and a team of digital experts who will continue to build repeatable best practices for managing digital competencies.
If you’re not capturing metrics around your digital capability and performance, then it’s tough to determine the value of digital transformation. We advise clients to establish well-defined key performance indicators (KPIs) that clearly communicate the quantifiable business value digital capabilities provide. Using customer-centric metrics like Net Promoter Score (NPS) or lifetime value measurement to capture performance are great examples of such KPIs. Once those are in place, set up a strong feedback loop from the KPIs back into the corporate strategy. Organizations that capture, communicate, and leverage such insights are on the path to digital success.
A company’s use and adoption of emerging technology is about more than adding shiny new tools to its ecosystem. It is about how flexible, iterative, and collaborative the company is in its approach to technology development. We advise clients to look at how their marketing and technology resources work together to co-create a digital technology roadmap. Leveraging modern architecture (APIs, cloud, etc.) to promote speed and flexibility can provide a significant competitive advantage. Using customer experience assets like personas and journey maps to steer technology design is a proven strategy with measurable outcomes.
We built this digital maturity approach to help companies assess overall digital readiness. But we know that some organizations might also want to gauge the strength of their specific digital marketing or e-commerce functions. We advise clients to build their digital transformation roadmap in three phases: crawl, walk, and run. Start with analyzing your company’s current digital maturity. Identifying specific strengths to enhance or weaknesses to tune up can create the foundation for your digital roadmap while also providing a comparative benchmark.
Then, assign accountability for critical developments. Many businesses still struggle to take action (even after they know what to improve) because they haven’t identified clear stakeholders. You can prevent this by distributing key challenges among relevant team members based on how disruptive the digital effort is to them. Use the value of digital advances to justify continued effort. Digital maturity should be an ongoing project rather than a fixed state because the pace of market change requires constant evolution and gradual improvements.
No matter where and how you start measuring your organization’s digital maturity, maintaining a customer-centric vision and strategy will provide a strong foundation for both digital scale and growth. Measuring the right set of KPIs and appropriately communicating them to the entire organization will ensure that everyone sees the value digital efforts are providing and how it is making the customer’s and employee’s lives better.