Posted by Vijay Krishnan and Jeffery Hall on November 25, 2019. In today’s ever-changing, connected, and digital world, organizations are constantly challenged to transform the way they operate and do business. Annual churn in the list of Fortune 500 companies shows that even seemingly solid business models can fracture.1 Businesses and customers today expect a high level of digitalization from the organizations they interact with, and “being digital” has become essential to staying relevant. To become digital enterprises, many organizations look to transform their technology business models, operating models, and their interactions with a goal of fully integrating digital into all aspects of the business. However, some organizations do this better than others.
Based on what aspects of digitalization organizations undertake, they can fall into one of many categories on a Digital Maturity spectrum:
Deloitte, in collaboration with Forbes Insights, conducted a survey with over 557 senior leaders of various global organizations responding about their experiences with recent technology implementations. In the survey we assessed the value of the digital solutions that were recognized by organizations across the digital maturity spectrum. We asked how these implementations helped meet key success criteria related to the benefits of digital and the challenges of digital:
- When implementing your latest digital technology, to what extent did it meet expectations for:
- Driving operational change
- Appealing to multigenerational users
- Improving customer interactions
- Promoting creative learning solutions
- Rewiring organizational touchpoints
- Promoting a positive end-user experience
- Promoting a collaborative and creative environment and fulfilling work for employees
- Driving creativity and innovation
At a high level, we learned:
- Organizations that invest more and drive toward becoming a fully digital enterprise are 1.5 times more likely to reap the benefits of a digital solution implementation compared to those that tiptoe around in the digital world.
- Even organizations that are mature on the digital spectrum meet or exceed their key success criteria only 75 percent of the time, leaving significant opportunity for improvement.
- More mature digital enterprises see change as a capability rather than an event.
Let’s look more closely at these findings.
Relationship between digital maturity and implementation success
One of our key findings is a direct relationship between the digital maturity of an organization and the level of success it achieves on a digital implementation. We also found organizations that are “being digital” (that is, those organizations that have changed their business models and interaction models with their customers to enable being digital at their core) are up to:
- 4 times more likely to meet the key success criteria for an implementation than those organizations that are just starting out on their digital journeys and are looking to leverage traditional technologies to automate existing technologies (Exploring Digital)
- 2 times more likely to meet the criteria than those who look to digital technologies to extend capabilities but are often still siloed and still largely focused on current business, operating, and customer models (Doing Digital)
- 1.5 times more likely to meet the criteria than those that are leveraging digital technologies, becoming more synchronized and less siloed while incorporating more advanced changed to their current business, operating, and customer models (Becoming Digital)
Customers also get a significantly better experience as organizations adopt digitalization and become progressively more digitally mature.
Organizations that are lower on the digital maturity scale are likely to struggle more in areas such as:
- Shaping the culture of the organization to be digital
- Promoting a consistent end user experience
- Adjusting hiring practices to support digital
- Driving creativity within the workforce
Still, there’s room for improvement, even within fully digital organizations
Fully digital organizations can significantly improve the experience of their end users, drive creativity within their workforce, and can shape the culture of the organization to flex for further digital capabilities. However even digitally mature organizations do not always achieve their implementation success criteria. These organizations tend to struggle in certain areas such as rewiring the touch points between the legacy business and the new digital operations to increase collaboration and adoption.
Evolution is part of existence, not a one-time event
Many digital enterprises see change as a capability rather than an event. In our ever-changing digital world, evolution is essential for existence. Organizations that do not recognize this and instead see change as an event to plan and staff for are more likely to fail and not realize their intended goals.
Going all-in on digital
This study shows that organizations should adapt and move toward being digital at their core to fully realize the returns on their digital investment. The digital enterprise is about organizing, operating, and behaving in a digital way. To be digital, organizations need to understand their digital DNA and activate it within the organization. That means developing leaders who know how to act, think, and react differently. It means creating a workplace that empowers teams to connect as they do in their personal lives. It means creating digital-ready talent through career development based in continuous learning. And it means building a high-impact HR organization that is ready to lead the organization. A digital enterprise can enable not only a change in technology but also in the mindset required to operate in a completely new way.
Vijay Krishnan is a senior manager in the in Deloitte Consulting LLP’s Digital & Cloud Enablement practice. He focuses on advising clients on organizational change management strategies aimed at maximizing user adoption of technology modernization and business transformation initiatives.
Jeffery Hall is a specialist leader in Deloitte Consulting LLP’s Digital & Cloud Enablement practice, advising and managing client business transformations driven by digital innovation.