DIGITAL MATURITY MODEL
Digital has become the center of attention post Covid. Organizations, especially from the BFSI sector, realized the importance of an organization-wide digital strategy because during the pandemic they faced the challenges to provide services to the customers due to the unavailability of the right digital strategy in place. Banks & financial institutions started heavily investing into the digital transformation to offer a great customer service while enabling digital solutions to empower employees & increase the efficiency and productivity.
Pandemic has completely reshaped the way people execute and interact with things in their daily life right from shopping, entertainment, e-commerce, and banking. During the pandemic different companies adopted different digital methods to provide convenience to them by offering doorstep delivery and all the required things without the need for them to leave their house. Consumer behavior during pandemic also reshaped their expectations and they have similar expectations when it comes to banking.
Customers do not want to go through the hassle of visiting banks unless there is anything critical and want to avail all services remotely. Here, it becomes important for banks to have required tools & technology in place to fulfill customer expectations. The importance of digital transformation has increased over the time as it helps organizations to keep up with customer demands and to survive the competition. It also helps companies to compete in the economic environment that is due to a myriad of factors. It also enables companies to develop processes and build a plan to incorporate new technology solutions to scale efficiently and boost company productivity.
Building a Digital Strategy for the digital transformation journey often gets challenging when organizations need to assess the current digital maturity of different business domains, finalizing the projects to improve the digital maturity and to execute the digital transformation journey. Organizations often get stuck in the digital transformation journey and find it difficult to start execution based on their digital vision. Digital Maturity Model plays an important role to enable the digital transformation and helps to build a digital strategy and roadmap for organizations to begin their execution phase.
What is Digital Maturity Model
Digital Maturity Model is a tool that enables the organizations to assess the digital maturity of their different business domains, helps to benchmark against their peers and provide goals & plans to achieve the desired level of digital maturity for different business functions.
Digital Maturity Model enables organizations to build the digital strategy and roadmap contextual to the focus areas inside the organization for different business domains, industry trends & competition, vision of the organization and business numbers. It also enables organizations to build a digital strategy that directly addresses the issues faced by the organization for any specific area such as customers, technology, data, operations, and product/ service delivery.
It also helps organizations to create different projects addressing the focus areas in different domains.
How Digital Maturity Model works?
Building Digital Maturity Model for an organization require following steps.
Define:
Define is the foundational step of the Digital Maturity Model. As the name suggests, in this step definitions of different domains have been defined. Also, sub-domains for every domain are defined.
Defining domain & subdomain provides clarity and helps gain the understanding about what will come under each domain & subdomain.
In the defined step, a Maturity assessment questionnaire is also prepared. Maturity assessment questionnaire contains the questions for every subdomain under each domain. For example, there is a domain name “Digital Strategy” in Domain Maturity Model and for this domain there are following subdomains- Business Alignment, Digital Budget Planning, Business Process Management & External Factors. For these subdomains, questions are prepared to evaluate digital maturity. To evaluate digital maturity for subdomain, a rating scale is prepared from 1-5. The rating scale is customized and prepared for every question under every subdomain.
The underlying principle to prepare the questionnaire is to check the level of digital maturity and presence of digital components in the particular sub- domain.
Assess:
The objective of this step is data collation from every business domain. Understanding the problems faced by every domain and how digital will address their problems. Also understanding the contribution of digital to make their day-to- day activities easy and increasing the efficiency to reduce the repetitive manual intervention. Objective is to also get the answers in every interaction for the Digital Maturity Questionnaire.
Data & Information from every interaction is collated & stored for future use. In this step, apart from meeting the teams of different business domains, meetings with the management team also take place.
Getting their inputs & understanding their vision for the company, their thoughts on digital and how digital can create a difference positively in their organization is very important as it is a course of action in the digital transformation journey.
Thorough Assessment of the competition and industry trends is performed in this step. Insights from competition and market trends helps to build a robust Digital Vision.
Analyze:
In this step, data collated & information captured from the “Assess” step is put into the Digital Maturity Questionnaire. Based on the rating scale defined in the “Define” step, rating to every question of the sub- domain is provided based on the response/answer.
Digital Maturity score of every subdomain is calculated from the score of questions under subdomain and following the same approach domain scores are calculated from the Digital Maturity Score of every subdomain.
By using the above-mentioned approach calculation for every domain defined in the first step is being carried out.
A table is prepared to put together the domain score for all the domains of the Digital Maturity Model. To calculate the Digital Maturity of the organization, different weightages are being assigned to every business domain.
In this step, defining improvement in the Digital Maturity Score of the organization is important. It provides the clarity about improvement required for every domain considered in the Digital Maturity Model. Here, to understand the improvements required at the ground level and build an impactful Digital Strategy, a top to bottom approach is being employed. Expected Digital Maturity score over 2-3 years post-digital transformation is being broken down at domain level and further domain level is being broken down at sub-domain level to understand the required improvement to reach to the desired domain score and leading to achieve organizational digital maturity score.
Improvement areas for every subdomain level have been identified and a list of different projects for every sub domain & domain level have been prepared to drive improvement and prepare a list of projects for Digital Transformation Journey.
Giving required weightages to every domain score, Digital Maturity score of the organization can be calculated.
Implement:
This is the final step of the Digital Maturity Model. In this step, insights gained from the “Analyze” step have been implemented to create projects.
In this step, based on the improvement area and focus area Digital Strategy has been created. Digital Strategy encompasses the organization-wide projects to drive digital transformation in the organization.
Digital Roadmap is also being created in this step to assign timelines to each project and identify the priority of the project for the execution.
Projects and initiatives mapped in the Digital Strategy document are focused to improve the Digital Maturity model score by addressing the problems/ issues or key focus areas identified at subdomain level.
Visualizing Digital Maturity Model
Table created in the analyze step helps to create the “Radar Chart” for the Digital Maturity model. Radar charts provide visual presentation of scores calculated for every domain. Radar Chart also helps us to visualize the expected domain score calculated in the analyze step. Following Radar chart is using the data of “Domain Score” calculated in analyze step.
Building a Radar Chart using the data of expected domain score against derived domain score helps to identify the area where more focus is required compared to other domains.
Why should organizations adopt the Digital Maturity Model?
Digital Strategy and Digital Transformation are core to organizations to survive the face of the future and to keep up with the customer expectations in this Digital World. Digital Maturity Models helps organizations to build Digital Strategy and provide a list of initiatives required to drive the Digital Transformation Journey.
Value proposition of Digital Maturity Model
Seems a little difficult going through all these steps and getting the required output? Following the above explained approach to build Digital Maturity Model will help to build a Digital Strategy and will further help to drive Digital Transformation Journey. Looking for the right partners to guide you in your Digital Transformation Journey?
The Digital Fifth is India’s First Fintech Consulting Firm and enables Banks, NBFCs and FinTechs to build their Digital Strategy and assisting them to drive their Digital Transformation Journey.