Boosting your digital maturity
The word ‘digital’ gets thrown around a lot, but what does it actually mean?
At a conceptual level, we define digital as a data-oriented mindset – a belief that the applications, insights and business opportunities from data are limitless and, because of this, will redefine entire markets.
At a practical level, digital is about the application of certain kinds of technology, by which we mean designing, building and operating those technologies in a particular way.
When it comes to investing in technology, pre-digital incumbents often don’t know what technology or technologies to prioritise. As the leader of a pre-digital incumbent, you may feel besieged by journalists, thought leaders and marketing teams who preach and promise about the future of tech. In addition, technology changes so fast that what’s considered cutting-edge today is obsolete tomorrow.
3 core capabilities that can bolster your business’s digital maturity
When prioritising investments, we encourage you to focus on structure and purpose, rather than specific technologies. It’s important to get the backbone right. Once you do, the rest will fall into place.
We call this backbone the digital enablement. This is not technology per se, but rather a core set of capabilities that will bolster your business’s digital maturity.
If you think of strategy, organisational design and culture as the foundations of your business, then the digital enablers are your support structures. Structurally, the two must be aligned to successfully support your digital transformation. Through analysing many companies and business models, we’ve found there are just three digital enablers you need to focus on:
Systems of intelligence (business-driven artificial intelligence).
These three enablers have been fundamental to the success of some of the biggest tech companies over the past 10 years, such as Google, Amazon and Facebook.
They also have the potential to transform your organisation from a static – dare we say, medieval – fortress susceptible to attack, into a highly competitive and productive machine.
Your digital success hangs on these 3 enablers
Our experience indicates that the application of these enablers (above anything else) is central to the architecture of digital success. So why these three? Fundamentally, each on their own offers incredible opportunities, whether it be:
The insights you garner from your data.
The customers and third parties you connect with on your platform.
The internal efficiencies and enhanced customer experiences you derive from your systems of intelligence.
But together, with these three enablers working in harmony, this is where the magic happens.
Why you need all 3 enablers to build your digital flywheel
In our book, Chasing Digital, we discuss the notion of the flywheel. (In mechanics, a flywheel is a device continually powered by its own rotational energy.) To get a better understanding of how these three enablers fit into the design of a digital business, take a look at this diagram, which represents the phases of building the flywheel.
If we group components, you’ll understand how the three enablers complement one another:
Box 1 represents the platform that facilitates interactions and exchanges between you, your customers and third parties.
Box 2 represents the data you collect from these interactions.
Finally, Box 3 depicts where you apply systems of intelligence, fuelled by this data, which is collected from your customers, employees and processes, continuously improving the experience you provide, as well as your internal efficiencies.
As you can see, each of the enablers sustains the others, so implementing all three is critical to the success of your flywheel.
Assess your current digital maturity to guide your digital strategy
The big tech companies, which we would classify as digitally mature, have mastered the flywheel and the three digital enablers. Now it’s your turn.
To begin this journey, you need to measure your baseline digital maturity to help you understand where to focus your attention first.
The application of data, platforms and systems of intelligence can be structured as a formula that describes your organisation’s overall digital maturity from a technology standpoint. Without effectively implementing the three digital enablers, you ultimately cannot compete in the digital economy.
Imagine your organisation’s digital maturity is represented as an overall index – a score out of, say, 10 or 100. The function itself is derived from the individual maturity score you assess for each of data, platforms and systems of intelligence. The formula looks like this:
In Chasing Digital, we explain in detail how to think about each of the three digital enablers and how to apply these to your business.
You can then return to this formula to assess your digital maturity. This will help you to identify your strengths and weaknesses, which will guide your digital roadmap.