What can SMBs learn from Deloitte’s study of digital maturity in organizations with 500+ employees?
Deloitte’s chief innovation and chief digital officer, Ragu Gurumurthy, and emerging technology and business trend analyst, David Schatsky, partnered to write an article in March 2019 evaluating the digital maturity of organizations. In doing so, they reverse engineered how you can determine the digital maturity of your organization.
The authors found a positive correlation between digital maturity and financial performance. “Higher-maturity organizations are nearly three times more likely than lower-maturity organizations to report net profit margins and annual revenue growth that are significantly above the averages in their industry.”
Which begs the question…what does it mean to be digitally mature?
To answer that question, they surveyed 1,200 executives from organizations with 500+ employees. The chosen organizations were evenly distributed across six industries:
They combined the insights of these executives with their personal expertise and discerned that organizations fell into one of three buckets - (1) Lower Digital Maturity, (2) Median Digital Maturity, and (3) Higher Digital Maturity.
In which bucket the organization was placed was determined by how well they executed seven different digital pivots across their operations.
The seven digital pivots included:
They remarked that “cross-functional execution” of these pivots resulted in greater benefit. In other words, the more of the pivots they executed across more of their departments, the better. The definitions of these pivots are as follows:
“Flexible Secure Infrastructure: implementing a technology infrastructure that balances security and privacy needs with the ability to flex capacity according to business demand.
Data Mastery: aggregating, activating, and monetizing siloed, underutilized data by embedding it into products, services, and operations to increase efficiency, revenue growth, and customer engagement.
Digitally Savvy, Open Talent Networks: retooling training programs to focus on digital competencies, and staffing teams through flexible, contingent talent models to rapidly access in-demand skill sets and flex the organization’s workforce based on business needs.
Ecosystem Engagement: working with external business partners including R&D organizations, technology incubators, and startup companies to gain access to resources such as technology, intellectual property, or people to increase the organization’s ability to improve, innovate, and grow.
Intelligent Workflows: implementing and continuously recalibrating processes that make the most of both human and technological capabilities to consistently produce positive outcomes and free up resources for higher-value actions.
Unified Customer Experience: delivering a seamless customer experience built around a 360-degree view of the customer that is shared company wide so that customers experience coordinated digital and human interactions that are useful, enjoyable, and efficient in immersive, engaging environments.
Business Model Adaptability: expanding the organization’s array of business models and revenue streams by optimizing each offering to adapt to changing market conditions and augment revenue and profitability.”
So, why is there a positive correlation between executing these pivots and financial performance? The assumption is that these pivots lead to “identifying and seizing new opportunities, developing new revenue streams, responding with more agility to customers and market demands, and operating with greater efficiency.”
Assuming you are hoping to achieve one of those four objectives, how would you go about executing these pivots? The authors recommend that you first focus on “a back-office functional area such as finance, HR, or R&D so you can help build confidence and digital skills at lower risk.” However, this approach assumes your market-facing mechanisms are not in need of an upgrade. First consider if an area of your operations is demanding assistance. If not, then determine which back-office operation you want to improve first.
After selecting in which area of your operations you will execute these digital pivots, you will need to identify which pivots to execute first. The authors recommend that the three foundational pivots you should focus on first include: (1) Flexible Secure Infrastructure, (2) Data Mastery, and (3) Digitally Savvy, Open Talent Networks.
Tactical examples of implementing a Flexible Secure Infrastructure include “adopting cloud infrastructure; embracing agile/DevOps methodologies; developing and using technology platforms where possible, rather than ad hoc applications; and implementing a cybersecurity strategy.”
Two simple ways to approach Data Mastery are to consider (i) what data you have access to that can inform what you build or how you service your customers and (ii) how your data flows through your organization so you can expedite daily operations with a better platform.
Digitally Savvy, Open Talent Networks is really about employing people who can effectively manage the new suite of tools you are implementing and having a hiring/employment model in place that can readily anticipate and adapt to the needs of your organization as they are informed by the market. This one is challenging but critical, and if you are experiencing difficulty in this area, you’re not alone. SMB Group found that medium businesses rank “attracting and retaining quality employees” and “improving employee productivity” as their top two business challenges.
If you don’t feel confident tackling these pivots, don’t shy away from them - find someone who can help! These pivots shouldn’t be a question of “if” but “when.”
After executing these three pivots is when you want to approach the other four at your discretion.
So, identify an objective, select an area of your business that impacts that objective, and get cracking on those first three foundational pivots. Opportunity awaits!--------------
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