Digital transformation is a journey to become a digital business. On that journey, the relationship between IT and business changes. IT evolves from supporter to enabler to full partner, giving rise to a fully operational digital business. This is necessary because a fully operational digital business is expressed through technology. Its health is measured by the digital signals generated by the myriad components across the IT stack that support it. Its success is determined by the security and scalability of its digital services. Its ability to compete relies on the adaptability of its infrastructure, applications, systems, and most of all, its people and practices.
There is no part of a digital business that is not intertwined with technology.
Ultimately, this journey is about the integration of business and technology. On this journey there are markers of maturity that can help both technology and business leaders understand how far they’ve come, and how far they have to go.
To help enterprises measure their readiness to thrive as a digital business, we developed a model based on these technical capabilities and then analyzed nearly 300 organizations selected from respondents to our annual State of Application Strategy research. From those responses, we developed a model to measure the readiness of organizations to thrive as a digital business. These measures span the use of core tools, technologies, and adoption of practices critical to the six key capabilities identified in our book.
Today, we’re thrilled to deliver the results of that analysis in a new report, the Digital Enterprise Maturity Index.
Our analysis finds that most organizations (65%) are still dabbling in the tools, technologies, and practices necessary to thrive as a digital business despite spending decades focused on digital productivity and, more recently, digital experiences.
The next few decades will see incredible progress toward digital business as the maturity of digital enterprises continues to grow. But this progress is supported by a continuous technology evolution that seeks to provide an adaptable enterprise architecture that can absorb and incorporate new technologies at the rate with which they emerge.
Maturity is made more difficult by the enormity of the task. Like human beings who make the most progress toward maturity in a single phase—that of adolescence—most organizations make the most progress toward maturity in the second phase of digital transformation in which IT doubles-down on modernization of the IT stack. For most organizations, the IT stack is extant and exhibits considerable interconnections across domains. There is an implied need to modernize entrenched practices and approaches to support the needs of a digital enterprise. That makes the task immeasurably more difficult and, in some cases, disruptive. One need only recall the very public dressing down of a major airline to recognize that modernization is necessary, but not without risks.
Still, the nearly one-third (31%) of organizations dawdling on this journey show signs of increasing maturity in one or two domains, implying that progress is tightly tied to the prioritization of projects focusing on the six key capabilities. And even the most mature organizations—the mere 4% we’ve dubbed digital doers—still struggle with maturity in a few key capabilities. This makes technology leadership a critical role in successfully navigating this leg of the digital transformation journey.
In addition to analyzing the state of digital maturity, we took a look at how organizations in each of the phases of maturity leverage technology. We learned that 39% of those dawdling on their digital transformation journey don’t take advantage of public cloud at all, and the most digitally mature organizations are more likely to use public cloud for business continuity and to achieve global reach.
We looked at digital priorities and benefits, as well as strategic plans for the use of platforms and AI/ML across the phases of maturity.
Our findings are not always surprising, but they tend to prove out the premise that operating as a digital business requires significant effort, and there are very few who can claim to have reached the finish line today. In other words, most of us are on the same journey, and struggling with the same challenges. That is a comforting thought, as is the clear finding that the benefits of continuing on the digital transformation journey are real and worth the effort.
You can dig deeper into our findings on the state of digital maturity in the Digital Enterprise Maturity Index.