The Relevance of Digital Maturity Assessments

Many organizations plunge into digital transformation initiatives without knowing whether they have the appropriate capabilities and practices to support the effort in place. Worse, few organizations know where to begin or what it takes to prepare for digitalization. This begs the question, “Are digital maturity assessments worth the money and effort it takes to conduct them?”

The Case Against Bad Digital Maturity Assessments

Maturity models and assessments have been the “bread and butter” of consulting agencies and academics for at least thirty years (and probably longer). In the past, I have questioned the usefulness of digital maturity assessments. In Developing Maturity Models for IT Management, Becker et al. do an excellent job of summarizing some of the main reasons for my skepticism. In addition to those mentioned by Becker, here are a few of my own:

Many Digital Maturity Assessments Are Overcomplicated

Overly complex maturity models hide behind the veil of pseudo-science. They attempt to convince the assessed organization of the validity of the findings and recommendations by applying false rigor to subjective criteria. (One such assessment, offered by a well-known firm, purports to assess more than 170 criteria!)

The resulting evidence, although often detailed and, at times, insightful, is suspect in that it is largely subjective in nature and based more on opinion than on fact. Understood in the proper context, such an assessment has merit. However, the results are usually presented in a fashion that suggests scientific empiricism (most likely to justify a premium fee charged by the consulting firm). This, in turn, leads some organizations to make bad decisions supported by science’s less insightful cousin, quackery.

Many Are Too Simple

The direct opposite of the overly-complex model is the overly-simplistic one. This type of assessment usually asks one or just a handful of participants a few basic questions. Then, like a carnival fortune-teller, spits out a simple but vacuous solution. The “Svengali” of all assessment instruments, the overly-simplistic model often amounts to nothing more than online “click-bait” used by vendors selling so-called digital technology solutions.

Few Digital Maturity Assessments Account for Risk

Risk, in the most basic sense, is uncertainty. While digital transformations share many of the same risks as other business initiatives, there are certain risks unique to digital. For example, organizations are prone to disruption from competitors using digital technologies that threaten the very existence of the organization. There are also risks associated with transforming from existing business models to new, digital models. One of the biggest obstacles in garnering support for a digital transformation is not understanding the risk attitudes of key stakeholders.

Most digital assessment models ignore risk entirely. Those that do address risk tend to focus narrowly on cyber security risks. Although cyber security is particularly important for many digital initiatives, it is just one of many risks.

Few Account for IT-Specific Practices

Many digital maturity assessments address IT from a technology-centric perspective and focus only on the infrastructure (e.g. cloud vs. on-premise) or on specific tools employed by the organization. Other assessments lump everything IT into one category as though IT were comprised of just one department tasked with a few simply activities. Although stable and predictable technology is a prerequisite for a successful digital initiative, it is not sufficient; nor is the role of IT merely to manage technology like the engine room of an ocean liner. IT responds to incidents, manages outages, reviews requests from users for technology, assesses the risks of changes, and performs dozens of other activities. As referenced in previous articles, it can be beneficial for IT to identify “zone of confluence” practices that help achieve both operational efficiencies and advance the customer position.

Strategy and Leadership Are Not Appropriately Addressed

Organizations ready for digital transformation have leaders that establish a compelling vision for the future business model, but most digital assessment models do not evaluate leadership’s understanding of the digital landscape or the extent to which they set a clear direction for the organization. Furthermore, no published digital assessment references the organization’s ability to run the current business and the digital business model at the same time, in other words, parallel execution models.

In short, the endless proliferation of maturity models (by some estimates, more than 100 IT maturity models) with dubious science is reason enough for concern. The fact that the end result of many such assessments is a vendor trying to hawk yet another tool does not help.

A Better Digital Maturity Assessment

Although an organization does well to be more concerned with solutions than assessments, a well-conceived and properly executed assessment can help to demonstrate where an organization is deficient; and thus, where the concentration of resources and prioritization efforts is likely to produce the greatest results. But how does an organization create a “Goldilocks” assessment?

The assessment (available for download at the end of this article) asks the respondent to rate statements. These statements serve as a starting point to assess an organization’s digital maturity (or digital readiness if a formal digital initiative has not yet begun). Although this is not a scientific or formal assessment instrument, it can help leaders determine whether it makes sense to enlist the help of an independent consultant who can perform a more targeted analysis.

How to Use Our Digital Maturity Assessment

This assessment poses questions related to six dimensions (to learn more about ITIL’s 4 Dimensions of Service Management, read Mark Hillyard’s excellent article):

• Strategy and Digital Positioning
• IT and General Management Practices
• Technology
• Organizational Development and Learning
• Risk
• Innovation

Scores from all dimensions can be aggregated to yield an overall digital rating for the organization. The scores for Risk and IT and General Management Practices are the largest influences on the overall score; thus, the instrument is skewed in this way.

Additionally, each dimension can be assessed discretely.

In either case, rate each question using a scale from 0-5 with 0 being the lowest score and 5 being the highest score.

Your Results: Overall Maturity Score and Dimensional Breakdowns

After rating your organization in each dimension, add up your points to see your aggregate maturity score. Here is what your final score means for your organization:

0-72 – A score in this range indicates that the organization has a low digital maturity and may need to improve key areas of the organization prior to launching a digital initiative.

73-144 – A score in this range indicates that the organization has some capabilities that will enable a digital initiative but could use significant support in mitigating risks or developing opportunities.

145-215 – The organization is well-prepared for a digital transformation but may need support in targeted areas.

Now let’s take a closer look at your totals in each of the six dimensions.

Dimensional Score Breakdown: Strategy and Digital Positioning

0-8 – A score in this range indicates that digital positioning and business strategy are poorly understood. The organization needs to clearly understand why a digital business model is necessary and how, in broad terms, it will be brought to fruition. It is critical that leadership clearly describes the vision for the transformation.

9-17 – A score in this range suggests that the organization has articulated a vision for the transformation but has not fully communicated this to the managerial level of the organization. It can also indicate that leadership does not understand digital positioning or how the existing business model will relate to the emerging digital model.

18-25 – At this level, the organization has a clearly described vision for digital transformation and it is shared at all levels of the organization. There is a high-level understanding of digital positioning and how to execute a digital position. The organization would be wise to further investigate other areas in this assessment to determine whether other parts of the organization sufficiently support the initiative.

Dimensional Score Breakdown: IT and General Management Practices

0-15 – Scores in this range describe an organization that does not have the practices necessary to support digital transformation in place, or those practices are new and poorly matured. It can also indicate that there is a weak relationship between IT and the digital business.

16-31 – In this range, an organization may have developed some mature practices that support the digital business. However, other practices are either not established or in their infancy. It is also possible that the organization has several strong IT practices but has not developed “zone of confluence” practices that support more than one digital position.

32-45 – The organization has well-established practices that support both IT and the digital business. The organization should continue to incrementally improve existing practices and look to other areas, especially technology, to increase efficiency through automation in key areas.

Dimensional Score Breakdown: Technology

0-12 – Scores in this range suggest that the organization is not using any digital technology and may not even be automating any significant activities, both of which are key to successful transformations.

13-25 – The organization likely has an IT Service Management (ITSM) tool that is fit for purpose and is making use of some automation. However, the organization is either not using digital technology in any significant way or is just beginning to investigate digital technologies.

26-35 – The organization is using automation in the right areas. The organization is also making use of digital technology to increase operational efficiencies, improve the consumer position, or both. Improvement opportunities potentially involve deploying dual-purpose or ITOps technologies that bridge the customer-facing end of the business with IT and operations in a “single pane of glass.” The organization may also want to investigate IT and General Management Practices and processes to ensure that the right processes are in place to support technology.

Dimensional Score Breakdown: Organizational Development and Learning

0-12 – Scores in this range suggest that the organization does not have employees with the skills and capabilities needed to make a digital initiative successful. The organization should start providing aggressive training, hire with digital skills in mind, and tie employee behavior and performance incentives to accomplishing digital goals.

13-25 – The organization has some skills required to support digital transformation but has gaps in key areas. It is possible that veteran employees do not have the appropriate skills, but recent hires have been specifically recruited with the “skills of digital future” in mind. Organizations in this range usually do not sufficiently associate employee skills, behavior, and performance with the digital initiative.

26-35 – Organizations in this range specifically hire employees with digital skills. They also tend to tie employee performance reviews to the acquisition and maintenance of digital skills and capabilities. At the higher end of the range, the organization provides digital career paths and growth opportunities for employees.

Dimensional Score Breakdown: Risk

0-20 – Scores in this range indicate that the organization has little understanding of risk. It is likely they take a laissez-faire approach, underestimate (or do not even recognize) threats and do not recognize opportunities. In other cases, organizations in this range tend to be extremely risk averse (without appropriate understanding of opportunities or the cost of inaction). Alternately, they have a risk-seeking attitude that is not balanced with prudence and realism. Organizations at this end of the spectrum tend to have weak cyber security mechanisms in place to protect organizational intellectual property and consumer information.

21-41 – Organizations have an understanding of risks and opportunities but are averse to cannibalizing or eroding existing business models in favor of the unknown. Likewise, they may understand risks but do not have in place appropriate strategies to address negative and positive risks. Organizations in this range tend to focus more on negative risks than on positive risks and opportunities.

42-60 – Organizations have an appropriate and mature attitude towards risk, balancing threats with opportunities. Cyber security is fit for purpose and protects both organizational assets as well as consumer information. Organizations in this range are willing to replace current products and business models as new opportunities become available. They are willing to accept occasional failures (including large failures) because they understand these in proportion to even larger successes.

Dimensional Score Breakdown: Innovation

0-5 – Organizations in this range tend to be overly conservative and unwilling to attempt an initiative if competitors have not already proved it to be successful. This tends to position them in “catch up” mode.

6-11 – Organizations in this range value digital initiatives but sequester them from the rest of the organization. This often means that they do not obtain the resources they need to be successful or, if they are successful, the benefits are not shared by the larger organization. Isolating digital initiatives generally does little to insulate the larger organization from risk.

12-15 – Organizations in this range value digital initiatives, whole-heartedly support them, and integrate them into the rest of the organization.

Try the digital maturity assessment yourself by clicking below and let us know how your organization fares.