As digital advisors, we frequently receive questions from business leaders about how they can measure the digital maturity of their organizations. The answer is multiple and goes beyond technology. Digital disruption is a clear and current threat to businesses that will not change. Leaders need to embed digital capabilities at the heart of their business and make digital a core skill, not a bolt.

But as your business matures, where are you focusing your efforts and how do you know you’re on the right track? Marcum Technology advises its clients to examine four key areas: culture, organization, knowledge and technology.

Culture

It’s important to create a culture that welcomes failure and encourages employees to test new solutions rather than berating people for trying something different. Marcum asks customers to determine how much they depend on digital capabilities to stay competitive. Heavily reliant on technology typically means that digital capabilities are a key part of the overall business strategy and deserve the attention of the CEO and the board.

In order to establish the right culture and create a forward-thinking organization, clients must have the appropriate leadership in place. Digital natives and leaders who are innovative and successful with combat cards can have a positive impact on an organization. The other component of a strong culture is communication. How an organization communicates its digital vision as an integral part of its overall strategy is indicative of the success of digital empowerment.

Organization

When providing advice, we look at the structure of an organization and whether customer journeys take priority over functional silos. Deploying the right resources in the areas of digital strategy, governance and execution shows that digital activation is built into the organization. Recently, we worked with a client to implement a ‘digital center of excellence’ approach to digital transformation, which involves creating a large-scale, federated operating model for organizational support and digital capacity growth. This has given the client internal digital capabilities and a team of digital experts who will continue to develop repeatable best practices for digital skills management.

Knowledge

If you don’t capture metrics around your digital capabilities and performance, it can be difficult 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 that digital capabilities provide. The use of customer-centric metrics such as Net Promoter Score (NPS) or Lifetime Value Measure to capture performance are great examples of such KPIs. Once these are in place, build a strong KPI feedback loop into business strategy. Organizations that capture, communicate and leverage this information are on the road to digital success.

Technology

A company’s use and adoption of emerging technologies isn’t just about adding brilliant new tools to its ecosystem. It is about knowing how flexible, iterative and collaborative the company is in its approach to technological development. We advise clients to examine how their marketing and technology resources work together to co-create a digital technology roadmap. Leveraging a modern architecture (API, cloud, etc.) to drive speed and flexibility can provide a significant competitive advantage. Using customer experience assets like personas and journey maps to guide technology design is a proven strategy with measurable results.

We built this digital maturity approach to help companies assess overall digital readiness. But we do know that some organizations might also want to assess the strength of their specific digital marketing or e-commerce functions. We advise these clients to build their digital transformation roadmap in three phases: crawl, walk and run. Start by analyzing the current digital maturity of your business. Identifying strengths and weaknesses can help lay the foundation for your digital roadmap while also providing a benchmark.

Then assign responsibility for critical developments. Many companies struggle to take action even after identifying areas for improvement, as they lack clear stakeholders. Avoid this by distributing the key challenges among the relevant team members based on the disruption of the digital effort for them. Use the value of digital advancements to justify continued efforts. Digital maturity needs to be an ongoing project rather than a fixed state, as the pace of market change requires constant evolution and incremental improvements.

No matter where or how you start to measure your organization’s digital maturity, maintaining a customer-centric vision and strategy will provide a solid foundation for digital scale and growth. Measuring the right set of KPIs and communicating them appropriately across the organization will ensure that everyone sees the value of digital efforts and how they improve the lives of customers and employees.

This article originally appeared on Marcum LLP’s website on September 20, 2021.


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