- Edwin Lee; Michael Barrett; Karl Prince; Eivor Oborn
Digital maturity as process: A continuous approach to developing your digital maturity
With the spend forecast to reach $2.8 trillion in 2025 – more than twice of the allocated amount in 2020 (IDC, 2021) – digital transformation continues to be organisations’ prominent strategic goals. Global digital transformation spending is also forecast to exceed $10 trillion over a five-year period for the first time.
The concept of digital maturity has become closely linked to digital transformation. Digital transformation in organisations can be broadly understood as the accumulated effects of multiple digital innovations, that bring about new actors, structures, practices, and values that can disrupt or complement the status quo within organisations, ecosystems or industries (Hinings et al., 2018). Beyond the adoption of technologies (such as artificial intelligence and the Internet of Things), digital transformation can also refer to new digital business models, and more modest initiatives such as legacy modernisation. Such initiatives often require structural changes, and for organisations to reconstruct processes and decisions; combined with ever-shorter innovation cycles, digital transformation is complex and difficult for organisations to accomplish. With this in mind, the concept of digital maturity has become a valuable tool to help organisations navigate through a fast-moving and continuously changing environment (Gartner, 2021; Rader, 2019; Schallmo & Williams, 2018).
Digital maturity can be defined as aligning people, culture, structure, and tasks – both inside and outside the organization –, to take advantage of opportunities enabled by technological infrastructure. In other words, the notion of digital maturity centres around how organisations can adapt, and apply digital technology, to compete effectively in an increasingly digital environment (Kane et al., 2017; Rader, 2019). Digitally mature organisations are more likely to be risk tolerant, agile, and capable of driving digital change. In one example, Westerman et al.’s (2012) study of nearly 400 companies, they find that digitally mature companies can perform up to 26% more profitably than their average industry competitors.
A number of frameworks have been developed to help organisations identify different levels or stages of digital maturity to meet digital transformation goals. Broadly, a model for digital maturity depicts the different discrete levels (including the dimensions and capabilities within), which together encompass a desired pathway from an initial state towards a target state (Berger et al., 2020). Capability dimensions within digital maturity models are generally clustered around areas that can influence organisations’ digital maturity goals, such as strategy, technology (evaluation and adoption of disruptive technologies), operations, organisational culture, leadership and more. A variety of digital maturity models have been developed, that serve multiple purposes: to (i) describe and assess the status quo (in so doing deriving a future target state); (ii) compare (for benchmarking purposes); and (iii) prescribe (for instance, in developing a roadmap towards the target state).
Recently, there has been increasing emphasis that digital maturity is not static or an end-state, and should be seen as something that is dynamic and evolves. In other words, instead of being a time-boxed programme of work, digital maturity needs to be perceived as a continuous and ongoing process of adaptation – a learning journey; correspondingly, the notion of digital maturity therefore provides organisations with an awareness of their progressions in an ongoing journey of digital transformation (Jäfvert & Parnefjord Gustafsson, 2019; Kane et al., 2017; Rader, 2019; Strömberg et al., 2020). This element of continuity is paramount, because when taken from a broader perspective, digital maturity is ultimately constantly in flux, can improve/worsen over time in organisations, is always ongoing, and seldom reaches a final stage (Mettler and Pinto, 2018).
To this point, Cresswell et al. (2019) created a framework of digital excellence, which takes into account the complexities that accompany a continuous evolution of digital maturity over time. Their continuous model is targeted at helping local health service providers take stock of their own priorities and maturity levels periodically, against shifting desired outcomes. Specifically, they recognise that over time, “goalposts” of what is defined as digital excellence or maturity change, and so a shifting endpoint needs to be integrated into conceptions of digital maturity. Moreover, they also put into consideration how different localised settings and contexts may impact digital maturity goals in organisations.
Despite the growing importance of a continuous perspective to digital maturity, empirical research on digital maturity in organisations that take such an approach remain sparse. In particular, the need for longitudinal data adds complexity and difficulty for research to easily explore these areas. However, this is a pertinent area that future research would find fruitful to investigate, particularly as many questions remain unanswered. For instance, how much would a change in setting and environmental context – such as the COVID-19 pandemic – affect digital maturity visions and goals? How do organisations transition between shifting digital maturity goals? How exactly do organisations achieve their digital maturity visions, in addition to the benchmarks provided within digital maturity models? Answers to such questions will be valuable in further unlocking the insights and benefits that a continuous approach to digital maturity brings.
Berger, S., Bitzer, M., Häckel, B., & Voit, C. (2020). Approaching Digital Transformation-Development of a Multi-Dimensional Maturity Model. ECIS Proceedings.
Gartner. (2021). Digital Transformation. Gartner. https://www.gartner.com/en/information-technology/glossary/digital-transformation
Hinings, B., Gegenhuber, T., & Greenwood, R. (2018). Digital Innovation and Transformation: An Institutional Perspective. Information and Organization, 28(1), 52–61.
IDC. (2021). New IDC Spending Guide Shows Continued Growth for Digital Transformation as Organizations Focus on Strategic Priorities. IDC: The Premier Global Market Intelligence Company. https://www.idc.com/getdoc.jsp?containerId=prUS48372321
Jäfvert, A., & Parnefjord Gustafsson, C. (2019). Digital Transformation in Digitally Mature Organisations: Managers’ Perspectives on Challenges in Progressing in Digital Maturity. Lund University School of Economics and Management.
Kane, G. C., Palmer, D., Nguyen-Phillips, A., Kiron, D., & Buckley, N. (2017). Achieving Digital Maturity. MIT Sloan Management Review, 59(1).
Rader, D. (2019). Digital Maturity – The New Competitive Goal. Strategy & Leadership, 47(5), 28–35. https://doi.org/10.1108/SL-06-2019-0084
Schallmo, D. R. A., & Williams, C. A. (2018). Digital Transformation Now! Guiding the Successful Digitalization of YourBusiness Model. Springer.
Strömberg, J., Sundberg, L., & Hasselblad, A. (2020). Digital Maturity in Theory and Practice: A Case Study of a Swedish Smart-Built Environment Firm. 2020 IEEE International Conference on Industrial Engineering and Engineering Management (IEEM), 1344–1348.