Digital Maturity vs Digital Transformation: 4 Key Differences Explained

There’s a big difference between being digitally mature and undergoing a digital transformation.

In this article, we’ll explore what those differences are and how they can impact your business.

Digital Maturity vs. Digital Transformation (in a Nutshell)

Digital maturity is the level of sophistication your organization has reached in its use of digital technologies.

This can be measured by the number of digital touchpoints you have with customers, how integrated your digital channels are, and how data-driven your decisions are.

Digital transformation, on the other hand, is a complete overhaul of your organization’s business model, culture, and processes to take full advantage of digital technologies. This is a much more radical change that requires a complete rethinking of how you do business.

So what are the key differences between these two concepts?

Let’s take a closer look.

What is Digital Maturity?

Digital maturity refers to the character of an organization as it relates to the use of digital technologies. 

In other words, it’s a measure of how sophisticated an organization uses digital tools and how integrated they are into the company’s operations.

When looking at this integration, we usually use a version of the digital maturity model.

The Digital Maturity Model

The digital maturity model (DMM) is designed to help organizations assess and improve their digital capabilities.

The model varies depending on the organization and there are many different versions.

But one basic example consists of four dimensions: 

Organizational, technological, operational, and cultural.

  • Organizational: How well is the organization structured to support digital transformation? This includes factors such as governance, leadership, skills, and talent.
  • Technological: How well are the organization’s technology platforms configured to support digital transformation? This includes factors such as architecture, data management, and security.
  • Operational: How well are the organization’s processes and systems integration to support digital transformation? This includes factors such as customer experience, business intelligence, and analytics.
  • Customer: How well are the organization’s customers engaged in digital transformation? This includes factors such as customer service, marketing, and sales.
  • Cultural: How well do the organization’s values, behaviors, and way of working support digital transformation? This includes factors such as innovation, agility, and risk tolerance.

Using a digital maturity model or framework can help your company assess where you stand in terms of its digital capabilities. It can also provide a roadmap for improvements and compare progress against peers.

For a deeper dive into your level of digital maturity progress, you can try a digital assessment tool.

For example, the Google + BCG Digital Maturity Benchmark is a free assessment tool that takes about 30 minutes to complete and will give insights into several digital marketing and engagement metrics.

Also, this podcast provides a good summary of popular digital maturity models used by organizations:

What is Digital Transformation?

Digital transformation is a more active process than digital maturity.

For example, unlike digital maturity, with digital transformation, you’re not just looking at how well integrated digital technologies are into your organization. 

You’re also looking to make a complete shift in how the organization uses those technologies to do business.

In other words, digital transformation is a strategic change initiative that seeks to fully leverage digital technologies to improve all aspects of an organization, from its customer experience to its operational efficiency.

Types of Digital Transformation

There are several types of digital transformation, including :

  • Business model transformation: This type of digital transformation involves changes to the way an organization generates revenue and profits. For example, a company might shift from a product-based business model to a subscription-based one.
  • Cultural transformation: This type of digital transformation seeks to change the way employees think, behave, and work together. For example, an organization might seek to become more customer-centric or agile in its approach.
  • Operational and Process transformation: This type of digital transformation involves changes to the way an organization produces goods or services. For example, a company might seek to reduce its reliance on paper documents and manual processes by implementing digital technologies such as document management software and workflow automation.
  • Customer experience transformation: This type of digital transformation focuses on improving the way an organization interacts with its customers. For example, a company might seek to improve its customer service or create a more personalized shopping experience.

As you can see, in each case, a company is actively employing new technology to initiate change at different levels of the organization and for different reasons.

Now let’s look at the key differences between digital maturity and digital transformation to get a better understanding of how they interrelate.

The Key Differences Between Digital Maturity and Digital Transformation

Scope

The biggest difference between digital maturity and digital transformation is the scope of the change.

Digital maturity is about improving your use of digital technologies within your existing business model.

This could involve things like using data more effectively, automating processes, or implementing new customer-facing technologies.

Digital transformation, on the other hand, is a much more radical change. It’s about completely rethinking your business model and organizational structure to take full advantage of digital technologies.

This could involve things like moving to a subscription-based business model, becoming a data-driven organization, or developing new products to enter new markets.

Pace of Change

Next is the pace of change.

Digital maturity is typically a slower process because it’s about making incremental improvements to the way you do things over time. It implies a certain level of comfort with change and the gradual adoption of new technologies.

Digital transformation, on the other hand, happens much faster, often in the face of competitive or societal pressures (i.e., COVID 19). This is because it’s a complete overhaul of your business, which requires a lot of changes to be made all at once.

It’s a journey, not a destination, though. So, even though the pace of change is much faster, it’s still an ongoing process.

As the process unfolds, you can measure how digital transformation is impacting your company by tracking a series of KPIs focused on aspects such as customer service, revenue, employee satisfaction, skills development, technology integration and more.

Impact on Business

Another key difference is the impact on your business.

Digital maturity usually has a smaller impact because it’s about making improvements within your existing business model.

Digital transformation, on the other hand, can have a much bigger impact because it’s a complete change to the way you do business. This can be disruptive, but it also opens up new opportunities for growth.

Level of Change

Finally, there’s the level of change.

Digital maturity is usually less disruptive because it’s about making improvements to your existing business model. It involves the nature of your company and includes factors such as:

  • company size
  • industry
  • competitive landscape
  • organizational culture

Digital transformation, on the other hand, is a much more disruptive process because it’s a complete change to the way you do business.

How Digital Maturity and Digital Transformation Relate

While we can understand that these are two different concepts, they are also very much connected.

In essence, companies with higher levels of digital maturity are in a better position to initiate digital transformation.

Because they’ve already invested in technology, they may see better commercial results from strategic shifts.

Source

In fact, as you can see from Deloitte’s survey results above, digitally mature companies experience approximately 30% greater revenue and profit growth when they execute new digital initiatives.

Bottom Line

So, what’s the bottom line?

The key difference between digital maturity and digital transformation is the scope of the change. Digital maturity is about making improvements to your use of digital technologies within your existing business model.

Digital transformation is a much more radical change. It’s about completely rethinking your business model and organizational structure to take full advantage of digital technologies.

Both processes have their own challenges and benefits. The best approach for your organization will depend on your specific needs and goals.

Contact us.

Interested in writing for us or advertising on our site? Reach out via our contact form or by email to discuss partnership opportunities with Digital Directions.

hello[at]digitaldirections.com

Contact Us