The most successful companies are not just enabling digital strategies — they become digital, placing technology at the center of how they do business. We recently found that 23 of the top 30 Fortune 500 companies are either digitally native or have fully incorporated digital into how they conduct business. Being digital requires several factors to work in harmony:
- A clear vision and strategy grounded in the needs of their customers and prospects.
- The ability to continuously build and ship lovable digital products and experiences.
- A secure and flexible modern technology platform.
- The ability to mine data-driven insights.
- Having an organization that can move at the speed of digital.
Achieving these elements is not about a project or a technology — it’s about a mindset and way of working that is committed to digital as a driver of success and is able to continuously sense and respond to consumer needs and wants.
Digital has shown the ability to create real and sustainable business gains. Banks, for example, have show more than two time improvements in revenue and double-digit improvements in transaction volume, frequency and customer retention.
Why, then, do the majority of organizations still fail to achieve their desired goals as a result of digital efforts? Because success requires a significant level of maturity across multiple capabilities, and most companies have insufficient sophistication in one or more important areas. Companies need to first understand maturity levels versus best-in-class capabilities, then identify those elements most in need of improvement based on unique business priorities, and finally set a disciplined, prioritized plan to drive sustained improvement.
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The 6 Critical Dimensions for Digital Maturity
In our experience working with clients, digital success requires maturity in each of six areas:
- Vision and strategy.
- Product and experience.
- Customer engagement.
- Technology and data.
- Business operations.
- Organization and culture.
Best-in-class capabilities are not necessarily required for each — the key actions and sequencing of areas to improve are dependent on one’s objectives and baseline capabilities. What is critical, however, is knowing what good looks like — and how you compare — in each area. This will allow you set the proper course for improvement.
Vision and Strategy
Begin with vision and strategy. The top firms have a well-defined vision, providing clear and unambiguous direction and visualization for how to create customer value and competitive differentiation, and is aligned so that all levels of the organization understand the direction, how it was chosen, and why it matters to them. It must also create energy with leadership generating top-down excitement and cultural momentum that drives buy-in. A vision can be oriented around areas like optimizing service, creating operational excellence or driving growth — but the direction needs to be clear, prioritized and create excitement to inspire action.
Product and Experience
The next key component is product and experience. Digital products should be insight-driven using customer and product performance data to invent, manage and continuously adjust digital products and experiences. It should also be fluid, meaning customers can seamlessly engage with a company how, when and where they prefer, whether digitally or physically. What’s more, it should be iterative, using measurement of outcomes to continuously improve and elevate the experience. The best digital products are aligned to the most important needs and desires of customers — and help them resolve their greatest pain points.
Next, customer engagement is about how to attract, engagement and retain the most attractive customers consistently over time. Exceptional customer engagement is responsive to customer needs and reacts quickly to customer behavior or mindset changes, personalized, delivering the right message to the right customer at the right time across any channel, and value-focused, delivering continuous value to the customer and, in turn, to the company. The best engagement strategies create a two-way relationship between customers and the brand, delivering value at every interaction. Done well, customer engagement drives increased willingness to spend and limits competitive consideration.
Technology and Data
No digital effort can be enabled without the proper technology and data to support it. Specifically, data should be scalable using cloud-based infrastructure, architecture and applications, and strong resource management practices. The data must also be unified, with clearly defined governance and engineering, and have predictive analytics platforms to anticipate needs for the customer and business, and be able to respond in real or near-real time. A strong tech and data platform is the underlying engine that drives the creation of value.
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Business operations enable organizations to operate holistically and leverage employees for the highest value tasks. Best-in-class operations are automated, reducing the need for human intervention, improving productivity and reducing costs; connected where workflows and processes are streamlined and synchronized across inter-dependent disciplines; and repeatable so processes are well documented and employees are trained in how to apply them.
Organization and Culture
The last core area is organization and culture, which should enable and encourage cross-team collaboration and decentralizing decision-making to enable speed. Organizations need to be adaptable so the structure is focused on delivering desired customer outcomes and enabling more horizontal rather than siloed org design; collaborative by leveraging shared goals and incentives, and ensuring the right skill sets are brought together at the right times; and empowered by promoting an adaptive growth culture and mindset, encouraging risk-taking and allowing employees to act autonomously to exceed customer needs and desires. Together, these characteristics will drive greater speed, higher levels of responsiveness, and nurture more satisfied, enthusiastic employees.
Finally, overarching all of these capabilities is a commitment to agility. Digital advances are happening at an ever-increasing pace and customer expectations continue to accelerate. To keep up, organizations must be willing to continuously adapt, to be creative at solving problems, and adopt the practice of continuous re-evaluation and improvement.
How Digitally Mature Is Your Organization?
To improve likelihood of digital success, first determine your level of maturity and key gaps across each of the six areas. Then, prioritize which of these areas are most critical to improve in order to execute the roadmap initiatives most important to your business. Finally, create a structured plan to close key capability gaps in a systematic way.
For less digitally mature organizations, this may require an upfront investment before realizing gains. For more mature companies, this may mean fine-tuning and investing in certain areas to continue to build on existing successes or respond to competitive threats. Regardless, having a clear and objective view of your maturity in comparison to those who do it best will serve as a blueprint to understand where, how and when you need to evolve.
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