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Digital Transformation | 11 MIN READ

Understanding the 5 P's of Digital Maturity

You understand that digital transformation does not happen overnight. It takes time to start new technical initiatives, to train your staff to operate differently, and to give your customers a better product. It takes time to learn how to do all of these things more efficiently.

 

Jump to the main takeaways:

 1 .Plan (Strategize, Analyze, Optimize)
 2. People (Those Who Need Tech)
 3. Process (Do it the Right Way)
 4. Partners (It Takes a Village)
 5. Performance (What's Under Your Hood?)
 I Don't Wanna Grow Up

 

Each business will progress at different rates. That said, there is value in being able to get there faster. You want to iterate faster than your competition, to have a better product, and to be able to meet your goals internally at a quicker pace. You’re changing because the world is changing and you want to be ahead of the game.

Everything you’re doing is with the goal of better serving your customers, right? That could be through the adoption of many different technologies, be they an online community or a cloud version of your software, or even better incident and asset management tools internally.

Whatever it is, you’re doing it because you want to get better at helping customers to choose—and to keep choosing—you.

The 5 Ps of digital maturity will help you to better understand what you need to keep your digital transformation moving forward. They’ll show you how to understand where you need to go, who you need to get involved, and how you can help them make your business accelerate your digital transformation and to keep becoming more digitally mature.

Let’s take a look.

 

1. Plan (Time to Strategize, Analyze, then Optimize)

Businesses have problems with digital transformation when they don’t have a well-thought-out strategy. Whether it's by a thousand cuts or one fatal gut punch, going down that road almost certainly means that your company's death sentence isn't far behind.

Incredibly, there are a LOT of businesses that think that they can just wing it, and that all of their digital transformation dreams will come true like they've been granted a wish by a princess at a Disney theme park.

A study by Deloitte from 2015 revealed that only 15% of respondents who were at the early stages of digital maturity had some kind of strategy. For those companies that are digitally maturing, though, 80% of them say that they have a clear strategy and direction.

So, at some point, most start to realize that flying blind is a good way to end up in the dirt, rather than in the cloud.

The same study notes that less digitally mature organizations put their energies into individual technologies. More mature businesses, on the other hand, have an eye towards the transformation of the business.

So, to become that digitally mature business, you have to be cognizant of the big picture, and how the smaller details help to bring the whole thing together.

The lesson here? Think small thoughts, get small prizes. Don’t base your plan on technology you think you should implement, Instead, base that plan on how you want to serve your customers, and you’ll be able to earmark the areas that really need improvement, and advancement.

You must recognize, though, that your plan is a living, breathing document.

As you follow the path to digital maturity, you’re bound to make some mistakes, take up with the wrong crowd once or twice, and maybe even get a little too drunk on your ideas.

But the point is, like anyone who’s attempting to reach maturation, you learn from those lessons, and you use them to continually optimize your plan.

If you can walk away from what you thought was a brilliant plan that just didn’t work, take the lessons you learned and reboot that into an entirely new, better understood, wildly optimized new plan, your business will be the better for it.

 

2. People (Who Need Technology are the Luckiest People in the World)

When it comes to achieving digital maturity as an organization, you've got to–and I can't stress this enough–put people before the technology aspect of your transformation process.

Let’s do a quick experiment. We’ll search for the phrase “people are more important than technology.” Here, I’ll do it for you.

When I did it just now, I got “about 161,000” results of pages with that exact phrase on them. Which leads me to believe that many people believe that people are more important than technology.

Friends, let us not, throw the proverbial baby out with the bath water and go back to churning butter by hand. All we have to do is remember that people are going to be involved in this process.

After all, what is your transformation about, if not to better serve people? People who will hopefully become customers.

Of course, you’ll also need people to help you implement your plan. Without the right people, you won’t have a chance at implementing the technology you need to be successful.

In the same way that you want a digital transformation strategy that is holistic, it’s “best to focus on building an organization and culture than can realize the strategy that’s right for you,” according to this great article by McKinsey.

Digital transformation is focused on technology, but to transform, it has to be about the people. They need to be lead and inspired.

The first step in cultural change is understanding that it is people first and that it is your job to find ways to involve and motivate your team. Motivation might be a little bit different now than it has been in the past. People now want to have a voice when it comes to these processes. They want to share their ideas, to feel like their input if valued.

According to an article in CIO Magazine:

"When you give them an environment where they can give input, you can move them in the right direction. Schedule one-on-one calls with your team, ask them what they are struggling with. Check in with them to know they are on board and that you’re all moving forward together."

When you’ve got that part of the picture painted, remember that people want to work for digital leaders. Deloitte did a study recently that showed that from 22 to 60 years old, people want to work for digitally enabled organizations.

Consumers have a lot more choice these days, and they’re going to choose the company that presents them with the best digital opportunities. Everyone is going to have to keep their digital acumen stronger than postseason Lebron in order to attract and retain the best people.

Remember this: people are not digital. Not yet. When that day comes, I, for one, will welcome our corporate robot overlords. For now, let’s make sure that our number one goal is to help people reach their full potential.

 

3. Process (Getting it Done the Right Way)

Every strategy has a hierarchical order that starts with the strategy and then moves into the tactics you’ll employ to carry out that strategy.

Your processes are the tactics that help you move your plan forward. Once again, we’re going to start with the people, because your plan will depend on the willingness of your people to execute these processes.

It’s all well and good, to identify goals and set up workflows, but it will all be for naught if you don’t have everyone pulling in the same direction.

You’ve already handled that, though, because you’ve thoroughly read and reacted to the section above, which has set your company’s digital culture engine firing on all cylinders, with the motor revving harder than a 2012 Honda Civic at a suburban stop light.

Your processes are what propel the machine along.

An article from Solnet points out that product and software development processes have the benefit of new techniques, like “continuous deliver, automated testing, rapid prototyping, and agile development methodologies,” all of which need to be active throughout every level of your organization.

Your product is just one piece of the puzzle. The processes you put in place to deliver that product are key to reaching the point of maturity that keeps you performing at the top of your game.

 

4. Partners (It Takes a Village)

When considering the tech that you need, it’s not enough to just find the best tech. That’s obviously your starting point, but there’s more to it than that.

You need technology partners.

What you really want to be looking for are companies who provide more than technology. Businesses need to be looking for the companies that are willing to really become partners in success. You need to be able to tap into the knowledge and expertise of your partners in order to really get strong collaboration that helps you reach your goals.

Honesty is a good quality in a friend, and an even better one in a technology partner. This article provides some good advice along those lines:

"First, technology partners should be ready to provide constructive criticism. Sharing hard truths – especially with a client – may seem uncomfortable, but it is what good leaders do and expect from those they work with."

You can find any number of companies that will be willing to sell you something, but the ones who will really be honest with you about what you’re up against, and what you need to solve it—and where you’re currently falling short—will be as valuable as the technology they provide.

You need for them to really understand what your goals are, not just what tech you want to use. You want to be on the same wavelength when you’re talking about what your end goals are for your digital transformation strategy.

Interestingly, one of the most important partners you’ll have on your path to digital transformation is your IT organization. This article from Forbes gives you a solid foundation for the reasoning here:

"In our recent study of over 200 companies on their digital readiness, we found a big difference in the ability of IT organizations to support digital transformation. Consider these findings from the study:

In companies that made the investment to restructure IT for digital transformation capabilities, the IT organization is an effective partner in digital transformation 86% of the time.

In companies that are still immature in the IT restructure effort, the IT organization is an effective digital transformation partner with the business only 43% of the time."

What we’re seeing here is that business are not involving IT soon enough in the process. Not doing so can cause massive internal issues. For example, you may end up with requests for support being directed to the wrong place. In a case like this, it’s incredibly important to make sure that you revisit your processes.

In order to be a very effective internal partner through your digital transformation aging process, IT departments really have to make a fundamental change in the way that they investigate, operate, and innovate.

Overall, whether internal or external, choose your partners well, and help them help you, as it were.

 

5. Performance (What’s Under Your Hood?)

To give you an idea of where you are in your digital maturity journey, you, my friend, are going to need a brand-new set of metrics.

You’ll also be aiming for a kind of digital dexterity. You’re on a journey and you’re collecting data along the way. You should be using the data that you collect to keep improving—to keep optimizing.

And more than that, it’s imperative that you find a way to make sure that all of your stakeholders have access to this data and that they’ll be able to understand, absorb, and analyze in order to keep getting better.

Because, once again (noticing a theme here?) this is all about serving your customers better. It stands to reason, then, that you’ll want to know how effective your undertakings are and quantify the results of your actions in order to make a case for or against any of the transformational efforts you’ve undertaken.

Digital transformation is most likely somewhere near or on the very top of most every leader’s agenda. And, somehow, less than 15% of companies can actually quantify the impact of their digital initiatives.

The above is from McKinsey’s Digital Quotient analysis, which goes on to say that it’s time to get rid of traditional KPIs. They’re poor indicators of the effectiveness of your digital efforts, and should be relegated to the confines of long-term impact measurements that show what’s happening annually or quarterly.

But, as Steven Skinner, the Senior Vice President of Cognizant Blaze Consulting tells us:

"As organizations become more agile, the KPIs must be tailored for new operating capabilities… Digital transformation efforts must be aligned with measuring where traction is achieved in a digital capability versus the results achieved at the end of a transformation. This helps assess and refine transformation efforts continuously."

And Marco Coulter at Digital Dexterity agrees. He points out, in this article, that the first projects in digital transformation will often take place over long, lapsed periods of time. The reason is that IT will be in the process of rebuilding itself first, and for that reason may take a while to be able to properly respond to evolving needs.

So, the metrics you’re really going to want to be looking at are:

  • Operational improvement
  • Customer experience
  • Financial impact

With these metrics, you’ll be able to really understand the impact of your transformation and, in the process, you’ll get a closer look at where you are in your growth.

 

I Don’t Wanna Grow Up

Digital maturity is about progression, but the progression must be one that works for your company alone—with the caveat that your company still wants to be the most mature one in your class in order to get the customer on your side.

One of the problems with measuring digital maturity is that you will be constantly comparing yourself against other companies and against the rise of new technologies. Your customers will be a major factor in how you decide how digitally mature you are, as well. As we explored earlier, you’ll want to be mature enough to woo the right people to help you along the way.

While it takes an entire company to be on board for this transformation, a key player in how this all comes together is your IT department. You’re making sure you’ve got the right people, the right processes, and the overall plan to move forward, and your IT department is the lynchpin that holds together each of the Ps in your “pod.”

The point is, maturity is all about how you operate. You can’t measure digital maturity in time—it’s measured in your ability to complete, cultivate, and progress.

You’re no longer concerned with being the coolest kid—you just want to be the most efficient one and then go home and put your feet up and read the paper.

Originally published Jun 18, 2019 12:00:00 PM