What is digital maturity and how to achieve it?

2023 04 13 · 3 min read

Tech buzzwords such as artificial intelligence (AI), augmented reality (AR), virtual reality (VR) and many others may sound impressive. However, not all digital solutions can actually bring tangible benefits to your business.   

Knowing that digital transformation usually starts and ends with the customer experience, it is crucial to take stock of your digital capabilities and plan development regarding the value it will bring to your customers. Thus, business leaders need to know where they are on the digital maturity curve to get the most out of their digital transformation.   

In today’s blog post, we invite you to gain insights on digital maturity by answering core questions such as what digital maturity is, how you can measure it and what benefits high-level digital maturity brings to your business.   

What is digital maturity?  

Digital maturity refers to a company’s ability to leverage digital technologies and capabilities, transforming its business processes and operations, driving growth as well as innovation, and enhancing customer experiences. In addition, it measures the organisation’s digital readiness, agility, and effectiveness in performing its digital strategy.  

Let us explore the role of digital maturity through a simple example: imagine you are setting up your smart home.  

When deciding on functions and devices a smart home needs, you come across the question – what is better? Will adding more sensors, detectors, automated systems and solutions that decide where and when the lights, heating or ventilation should be switched on, video surveillance, alarm systems and all sorts of modern devices, or just installing the things that actually make your life easier? There may be exceptions, but most people would choose the latter.   

The same applies to digital transformation. There is no need to introduce everything immediately just because it is trendy, smart or has worked for someone else. The key criterion should not be the technology itself but the value that it brings to the company and its customers. Unfortunately, in digital transformation, it is a common practice to introduce as many advanced solutions as possible before the “foundations or walls of the house” are even built. 

How to measure digital maturity? 

Before you can foster digital maturity, you need to know the real situation of where your organisation stands. A digital maturity assessment model is one of the most reliable ways to do that. The model evaluates an organisation’s digital capabilities and helps to set a proper improvement plan.  

The digital maturity assessment model covers areas such as:   

• Strategy and implementation;    
• Channels, their purpose and compatibility;    
• Technology, tools and integrations;    
• Usability and ease of use;    
• Data, analytics and monitoring;    
• Personalisation, optimisation, and automation.   

The digital maturity assessment shows an organisation’s actual maturity level, allowing it to take a more strategic approach to digital transformation and improve competitiveness. Moreover, it gives valuable insights into existing digital capabilities’ strengths and weaknesses, benchmarks against peers, and new growth opportunities, as well as sets an action plan for enhancing customer experience and increasing efficiency. 

What are the main levels of digital maturity? 

Depending on the breadth, depth and, most importantly, proficiency with which an organisation has mastered its digital capabilities in these areas, we can identify five primary levels of maturity.   

• Emerging. The lowest level of maturity is those with an embryonic digital experience, which tends to apply to businesses and organisations that are just starting their digital journey or have been stuck in one place for a long time. Their digital channels are mostly limited to their website and email system;  
• Basic. A little higher, at the level of a basic digital experience, are the organisations that have an e-shop or self-service portal but are slow to exploit other digital opportunities;  
• Established. Businesses that deliver a seamless digital experience by using digital opportunities, heavily investing in technologies, and systematically striving to improve the user experience. These businesses have usually implemented the multichannel concept. Yet, such companies’ customer experience has not reached the highest level because their channels focus on the business process, not the user;  
• Optimised. Meanwhile, organisations effectively executing the omnichannel concept can boast an immersive and optimised digital experience. They can masterfully manage and coordinate channels to ensure a strong customer connection and leverage technologies for business growth and higher efficiency;  
• Advanced. Finally, exceptional and advanced digital experiences are delivered by innovative organisations that have managed to create new business models and manage new ecosystems. In many cases, the global market is also open to these businesses.   

Of course, this is a universal model. In reality, there are many different trajectories of maturity or even targeted strategies focused on the depth of one or several competencies. For example, depending on the nature of the industry, the competitive environment and the business model, it may make sense for an organisation to focus less on the development and usability of its digital channels and more on data, analytics and personalisation.    

Developing a company’s digital experience unsystematically can lead to low or slow returns on IT investments, stagnant business growth and poor customer satisfaction. Therefore, thinking holistically, evaluating the alternatives and justifying your priorities is vital for successfully implementing digital experience initiatives. This is the way to get the most out of your digital experience.  

Why is digital maturity so crucial for companies? 

Reaching a high level of digital maturity is necessary for organisations that seek to prosper and maintain a competitive edge in the digital economy. It also plays a vital role in enabling successful digital transformation and allowing businesses to achieve various advantages.  

Global research confirms the importance of high-level digital maturity in enabling better customer experience. For instance, experts from Deloitte estimate that organisations with a strong focus on customer experience have 60% higher profits than their competitors who do not.   

Focusing on customers and their needs and their experience shopping or using a company’s services delivers actual financial returns. For example, McKinsey‘s research shows that the best-performing 10% of digitised enterprises earn as much as 80% of their industries’ digital revenues. These can range from cost optimisation to increasing customer loyalty.  

As you progress towards digitisation, it is essential to clearly understand the current situation and your future aspirations. You can get to where you want to be by having a good idea of where you are. 

Simply having high digital maturity levels does not guarantee a successful digital transformation. It is essential to have a comprehensive digital transformation strategy that enables making difficult choices regarding interpreting customer trends and generating value. A strategy is vital as no digital maturity model or tool can dictate where a business should invest, how to read customer trends, create value, or allocate resources. If you want to consult about your digital transformation journey, the Baltic Amadeus team is here to help you.