Digital Maturity – What is it? And why should you care?

Digital maturity refers to an entity’s ability to respond to/take advantage of technological trends and changes in the market.

Regardless of how you feel about technology and the fast-paced world we live in – keeping up with technology is a modern business necessity. Your staff and clients expect you to move with the times, grow, and take advantage of different technologies. If you don’t – you will eventually lose staff or clients, or likely both. 

Technology is not the enemy

There is a wide range of technologies out there that make life easier – they just require some training and change (often a scary word!). Technology can remove manual processes and increase efficiency – in all industries and business models. There is a lot of literature on digital maturity and the various levels. 

I recently participated in the emerging leader’s program for AGN – an international network of accountants and advisors that work together to support members and provide high-quality, practical business advice across the globe. The program required teams to identify levels of digital maturity and then determine strategies to move up through the levels (I will cover this in my next article).

The three identified levels of digital maturity are – adaptive, reactive, and proactive.

Adaptive

The characteristics of this tier:

Unwilling or unable to adapt easily to technology changes.
The firm may not understand what changes are available or needed, feel overwhelmed with options, unable to afford the money or time to invest, or unwilling to make changes. The adage – if it ain’t broke, don’t fix it.

Lack of clear strategy.
There is no clear strategy to adapt to digital transformation and, therefore, no timeline for change. Strategy is a key component for transformation and ensures technology is being implemented to support business objectives and that the business is not overwhelmed with options and costs.  A strategy will also ensure that people are given ownership of tasks and can take responsibility for completing them.

No competitive advantage.
If there is no plan for technological advancement and no desire to do so, then it is hard to be competitive. In this business environment, technology is always changing, and clients expect to be able to use various techs for communications and services.  The younger generation expects their providers to be able to offer the latest technology and provide them with options that take advantage of these. For example, information sharing – via email or a portal, different payment options, various communication options.

Lack of adequate knowledge.
This tier’s organisations lack the knowledge to adapt and advance their technology and offerings. Companies fail to recognise their needs and the benefits of modernisation due to their traditional and arguably old-fashioned mindsets. They will, therefore, fall further behind their competitors and become increasingly inefficient. Often it can be overwhelming to determine which technological improvements to implement.

Reactive

The characteristics of this tier:

Follows top tier.
Organisations in this tier follow up with advancements being adopted by leaders in the industry. They don’t tend to implement new technologies unless it’s been proven to be efficient and effective by more successful entities. They follow rather than lead and are often one step behind in technology developments that they implement.

Clear strategy.
In this tier, organisations tend to have a clear strategy for digital development adaption and integration of technology in selected areas only. Not all areas have a clear and precise strategy. They have pockets of innovation and believe in the importance of process improvement and effectiveness. Still, they lack focus (often within the leadership team), so it is not always implemented.

Low risk-taking.
They are known as low-risk takers and prefer to see technology working in other organisations before they take the risk to implement it themselves. They have limited use of advanced technology and don’t have the right understanding or trust in relation to the level of security with technological developments. They tend to have semi-automated processing in selected areas but nothing advanced.

Proactive

The characteristics of this tier:

High use of blockchains, AI, big data, and robotic process automation.
Organisations in this tier take advantage of blockchains (a method of recording information that makes it very difficult, if not impossible, to be changed, hacked or manipulated), AI (artificial intelligence – think ChatGPT), Robotic Process Automation (software that makes it easy to build and manage software robots that emulate human actions). 

Has a clear, coherent, documented strategy for digital developments and advancements.
An extensive strategy is written, and tasks are assigned with timelines to various team members to ensure accountability, and that work is completed. Leadership understands that these things take time, and once the commitment is given, the firm moves forward.

Proactive approach to emerging technological advancements with team input.
Research, constant learning and change are important at this level. So is talking to your team and other stakeholders. What ideas do staff have? What have they seen in other organisations? What do clients want? Entities in this tier are open and willing to listen to all input without judgement.

With innovation being the norm and client expectations constantly changing, embracing digital maturity is no longer a choice but a necessity in today’s fast-paced world. As the business landscape evolves, those who proactively adapt and embrace technological changes will be better positioned for success. Embracing digital maturity is a forward-looking imperative for businesses that aim to thrive in the digital age. If you are an accountant or advisor and would like to join the AGN emerging leader’s program and learn more about this topic, contact me.