Five characteristics needed to achieve digital maturity
Many companies today are looking to transform, and become more digitally mature. However, when making this transformation an interesting question regularly comes up: what does it really mean to be a digitally mature enterprise?
In my opinion, a common mistake is that many businesses assume that using digital solutions – such as email, websites, video conferencing, social media or even chatbots – makes them digitally mature. Although all these solutions are based on IT infrastructure and software solutions, using them doesn’t necessarily make an enterprise digitally mature.
When it comes to what makes an enterprise digitally mature, and understanding how others view this subject, I’ve identified five characteristics for enterprises to achieve digital maturity. Let me introduce them:
- Firstly, digitally mature enterprises use data-driven decision making, rather than opinion-based decision making. Many of us have spent countless hours in meetings discussing the potential advantages and disadvantages of certain alternatives, but the discussions are usually entirely based on the opinions of the participants that, although based on experience, are more often than not irrelevant to the situation at hand. Digitally mature enterprises aim to make decisions based on data.
- The second characteristic is concerned with persistent experimentation. There are many situations where the data required for decision making is not readily available. The solution is to experiment with all the alternatives, with the intent of collecting the data required for data-driven decision making. Experimentation can be achieved by A/B testing, but also through quasi-experiments or more qualitative means such as simply trying new ideas in customer meetings.
- Third, digitally mature enterprises continuously strive for fast feedback loops. The time between taking a decision and having the data to determine the effect of a decision should be as short as possible.
- Fourth, digitally mature enterprises are very intentional about strategic data collection. The ambition to base decisions on data encourages enterprises to start collecting data on likely future decisions early, so that the most relevant and required data is available when necessary. This doesn’t mean that digitally mature enterprises collect all possible data, but they do collect lots of data.
- The fifth and final characteristic is that digitally mature enterprises focus on pervasive automation. Any task that is even remotely repetitive is a candidate for automation. The human talent in the enterprise is directed at tasks where human skills such as creativity, problem-solving, analyzing and initiative are required. Everything else, wherever possible, is automated.
Based on these five characteristics, I personally find Ericsson to be more inclined to growing a digitally mature culture, which is no doubt needed in the industry today. In a recent report published on 5G by Ericsson, it mentions the main drivers for digitization which exactly match the ideas I have explained in the five points above. It also explains the five main types of digitization, and for me these truly depict how digitization can be implemented.Download report
Arguably, many of those working in a software services organization can claim they’re a digitally mature enterprise, since they’re characterized by these attributes (to an extent). With that in mind, perhaps a more accurate deciphering question should be, ‘How digitally mature is your company?´. For me, it’s not a binary situation, but rather a situation where a company is more or less digitally mature. Perhaps it is time to start working on the techniques to quantify the level of digitalization in a company?
To conclude, digitally mature enterprises are highly agile, with capabilities that enable self-managed teams to drive their own roadmap with minimum dependencies. Digitally mature enterprises exhibit a set of characteristics that differentiate themselves from traditional companies. These characteristics touch the culture, norms, values and beliefs as well as the ways of working, i.e. the ‘soft’ aspects, as much if not more than the ‘hard’ aspects of the company, like software, data and AI.
So, when going through the process of digital transformation and aspiring to become a more digitally mature enterprise, make sure to focus on these characteristics, because the more visible, hard evidence is a consequence of these ‘soft’ aspects and not the other way around. We should all compare our working structure with the five points above and decide on whether we really are a part of a digitally mature enterprise. And if so, how digitally mature are we?!
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