Defining a digital transformation maturity model

SHEKAR K. RAO.
(PMP | CISA | LSSBB | CSM)
12-07-2017 shekarkr@yahoo.com | +91 9886571932
All Rights Reserved. Not to be used or reproduced without written consent of author.
1
PROPOSAL PAPER:
A DIGITAL TRANSFORMATION
MATURITY MODEL FOR BUSINESSES
Shekar K. Rao
12 July, 2017

SHEKAR K. RAO.
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EXECUTIVE SUMMARY
Digital transformation is shifting consumer habits and challenging traditional
business models. Driven by the growing number of platforms, devices, and
payment factors, product and service oriented companies need to develop
and execute a forward looking strategy that transforms their digital offerings to
remain relevant across the customer lifecycle.
Based upon the needs of a rapidly changing global economy, and increased
competition within an ever-increasing confined space, a number of companies
have earnestly begun the difficult journey to overhaul themselves and ensure
that they stay relevant, and their businesses remain profitable in the digital
world.
However, many struggle to either plan out the transformation well, or are left
clueless about the current status of their journey. In both cases, effort and
cost get expended, which can turn out to be a terrible nightmare for CxO level
executives. The major pain point turns out to be establishing a waypoint in a
quantitative fashion; a milestone or a flag-post that shows where the
organization is, and where it should go next.
This is where a Digital Transformation Maturity Model (DTMM) can be of
immense help.
 It builds upon modified versions of traditional, successful maturity
models like the CMM or the CMMI to identify clear stages and
symptoms of the various phases of a Digital Transformation journey,
and forms one of the two main dimensions of the model.
 The second dimension of the DTMM comes from traditional impact
areas for a business such as Strategy, Leadership, Processes, Data,
People and Technology. Most, or all, of these areas are referred to in
popular business excellence models like the MBNQA or EFQM
Frameworks in one way or the other. Hence they can be tailored and
used as per the nature of the business.
This paper is an effort in developing such a DTMM using these two
dimensions, and can be considered as a first step in the definition and
development of a more quantifiable and user-friendly methodology to evaluate
the status of a Digital Transformation initiative.

SHEKAR K. RAO.
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TABLE OF CONTENTS
EXECUTIVE SUMMARY.....................................................2
TABLE OF CONTENTS.......................................................3
INTRODUCTION.................................................................4
BACKGROUND...................................................................5
PROPOSED DIGITAL MATURITY MODEL.........................7
NEXT STEPS......................................................................8
CONCLUSION ....................................................................8
ADDITIONAL RESOURCES AND READING ......................9

SHEKAR K. RAO.
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INTRODUCTION
Digital Transformation(DT) has become the preferred solution of expansion for a
number of businesses in the 21st
century. An increasing number of organizations
are being forced to undertake DT as a means of staying relevant, or because
competition is forcing them to do so, or quite simply based upon the fact that their
customers have become more commercially and technologically savvy in an era
of multiple product and service providers. It seems to be assumed to a large
extent that if technology is thrown at a business solution in the forms of new
tools, platforms and services, it will automatically help the business expand and
grow. This has led to a spurt in implementation of DTs across the board, and
many of them are tending to lean towards a display of technological prowess to
showcase progress of achieving business goals and performance.
At this point, it is imperative to understand that achievement of business
excellence through DT needs a number of other factors, or levers, to be
successfully applied as a consistent organizational change program.
Organizations are currently finding it difficult to use an objective evaluation
mechanism to find out these additional levers that are influencing or impeding
their DT journeys, or are choosing to forego identification and implementation of
such levers on the assumption that technology will override everything else. Even
if the levers are somehow determined, using these levers for effective and
objective governance of the DT program is proving to be a hard nut to crack.
There are a number of alternative frameworks and models available in the
industry which can be used to identify these levers, or quantitatively provide an
in-depth analysis of the current status of a DT. Some of them focus exclusively
on attaining a superior level of business excellence (MBNQA & EFQM being
prime examples), while others confine themselves to improving business areas in
silos (ITIL, CMMI, ISO etc.). However, the more effective models tend to use a
staged representation, which is then extrapolated as a quantitative
representation of the status of a DT journey.
This whitepaper proposes a digital maturity evaluation methodology that is based
upon the Maturity Model as defined by the SEI-CMM, and is intended to help in
categorizing the DT effort across a set of 5 predefined levels, in a prescriptive
and aspirational manner. It is intended to help companies take an objective look
at the current state of their DT journey, and/ or provide a defined set of stages
through which they must pass on the journey to achieve digital excellence.

SHEKAR K. RAO.
5
BACKGROUND
Before outlining a solution that utilizes a Maturity Model and a defined set of
Organizational Levers, it would be useful to provide a definition of both these
components. This will help in defining a concrete architecture to the proposed
Digital Maturity solution based upon a clear blending of these two dimensions.
a) Defining the Levels of a Generic Maturity Model
The most common form of a 5-level Maturity Model is as illustrated below.
Level – Name Key Purpose Expected Outcomes
1 – Initial
Motivate people to
overcome problems and just
"get the job done"
 Ad hoc processes
 Inconsistent outcomes
 Rework
2 – Managed
Build disciplined work unit
management to stabilize
work and control
commitments
 Repeatable practices
 Reduced rework
 Satisfied commitments
3 – Standardized
Develop standard
processes, measures, and
training for product and
service offerings
 Productivity growth
 Effective automation
 Economy of scale
4 – Predictable
Manage process and results
quantitatively and exploit
benefits of standardization
 Stable processes
 Reuse / knowledge
management
 Predictable results
5 – Innovating
Implement continuous
proactive improvements to
achieve business goals
 Planned innovations
 Change management
 Capable processes

SHEKAR K. RAO.
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b) Identifying the Levers affecting Digital Transformation of a Business
Digital Transformation impacts all areas of an enterprise, and the ultimate
success of a DT initiative is defined by the reworking of several key business
functions, processes, and models, with the state of each contributing to the
evolution of digital maturity. Combined, in any size and shape, investments in
any or all of these levers help determining digital transformation in an objective
manner.
Based upon business requirement and popular excellence models, the following
levers can be proposed*:
# Lever Relevance and Coverage
1 Strategy Articulation of vision, governance, planning, and
management processes that will support the
implementation of the digital strategy.
2 Organization Defining and implementing the changes in
communications, culture, structure, training, and
knowledge management within the organization that will
enable it to become a digital player.
3 Customer
Focus
Using the digital transformation of customer journeys to
improve focus on customer participation and
empowerment, and identification of new benefits created
in customer experience
4 Technology Improving the capabilities that enable effective
technology planning, deployment, and integration to
support the digital business, as well as keeping ahead of
the competition.
5 Operations Focusing on the capabilities that support the product/
service provision that lead to higher automation, and
dynamically flexible operations in delivering the
products/services.
6 Partnerships Increased involvement of partners in a digital ecosystem
development, and sustenance of partnerships as a key
element for a digital business.
7 Innovation Improving capabilities that enable more flexible and agile
ways of idea generation, as well as evolution of ways of
working that will form the basis for an effective digital
business.
*Note: The above levers have been defined from a basic evaluation of popular Business Excellence models
like MBNQA and EFQM. The list is not intended to be exhaustive, and additional levers may be identified
based upon the type and nature of the business being evaluated for digital maturity.

SHEKAR K. RAO.
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PROPOSED DIGITAL MATURITY MODEL
The table below provides a view as to how the two components can be blended together to develop a cohesive Digital
Transformation Maturity Model (DTMM), which can be used in a practical manner to evaluate the stages or status of a DT journey.

SHEKAR K. RAO.
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NEXT STEPS
1. Additional levers may be identified based upon the requirement of the
business and the nature of the industry, and mapping to the relevant
maturity levels done accordingly.
2. Based upon the high level outline tasks proposed in each level of the
model for each of the levers, a questionnaire needs to be developed for
gauging the status of the DT journey on a quantitative, objective scale.
3. Weightages can be given to each of the levers for the assessed
organization, so that they can choose the priority of which lever they want
to use to obtain a more effective DT implementation
4. A cumulative rating for the overall DT program can then be fixed as a
baseline from which the organization can start improving.
5. Based upon assessment results, a roadmap can then be constructed with
inbuilt governance reviews to review the progress at key milestones of the
journey.
CONCLUSION
Digital Transformation programs are complex to monitor and evaluate over a long
period of time. The effects of the transformation may take a longer time to
manifest themselves as benefits to the organization, especially in an age of
economic turbulence and frequent technical improvements. These can be
assuaged by having a clear staged roadmap as part of the strategy, and usage of
a user-friendly maturity model to showcase the current status and future potential
across the organization.
Maturity models have had a long and successful history in tracking and
governance of organization-wide change initiatives. The original version of the
CMM has indeed lent itself to multiple interpretations, and has withstood the test
of time as the premier model used by organizations to evaluate different aspects
of the IT components of their businesses.
Hence, it is highly recommended that organizations use a Digital Transformation
Maturity Model as both a Gap Analysis tool and a Strategic Roadmap to guide
them along the journey to digital excellence. This will help in getting a deeper
understanding of the aspects impacting the business, and also ensure that
organizations are able to have a 360° view of the environment in which they
operate in. Governance also increases by leaps and bounds, thus ensuring that
companies do not expend money, effort or technical knowhow on a failing
organizational change initiative.

SHEKAR K. RAO.
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ADDITIONAL RESOURCES AND READING
# Name and Source
1 The Capability Maturity Model Ver 1.1. Paulk et al. 1993
2 Manuals : CMMI for Development & CMMI For Services. The CMMI Institute © 2010.
3 Digital Transformation Toolkit, Govt of South Australia © 2016
4 The Malcolm Baldridge National Quality Award Framework (MBNQA)
5 The European Foundation for Quality Management Framework (EFQM)
6 The Six Stages of Digital Transformation Maturity. Brian Solis (Altimeter/Cognisant)
7 Digital Transformation : A Roadmap for Billion-Dollar organizations (Cap Gemini/MIT
Sloan Institute © 2011)
8 IDC Report : DTMM and Digital Roadmaps (IDC/Meredith Whalen © 2015)
9 The Digital Maturity Model 4.0 (Forrester/Martin G & Shar V © 2016)

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