Author: Bernard Boire, M.Sc.A. , FIC
When looking at a digital transformation, after having determined and quantified a company’s strategic and operational objectives, the second step consists in evaluating its digital maturity.
According to the BDC, companies with a higher level of digital maturity generate more growth, sales and benefits than their counterparts.
Thus measuring and understanding your company’s digital maturity is a major and important issue. These days, this type of evaluation is conducted as part of the changes happening within what is commonly called the 4th industrial revolution, “Industrie 4.0”, or “Smart Manufacturing”. Thus the term 4.0 maturity.
Many organizations have developed their own methodology (including MIT, BDC, MEI and many others) for evaluating a company’s 4.0 maturity. Each methodology approaches the problem from a different angle. They can be classified in three categories:
- The technological approach comes in two flavours:
- Some simply fills a checklist verifying whether or not certain cutting-edge technologies are present.
- Others go further by assessing the relevance for the company of each of these cutting-edge technologies, in terms of complexity, cost and beneficial impact on their strategic and operational KPIs.
- The second one, the processes approach largely ignores technologies and focuses on the nature of the processes in place, more specifically the extent to which they reflect the adoption of the key principles of 4.0 digitization:
- Digitization of processes and automation of operations, in order to ensure the virtualization and transparency of information;
- Interoperability and interconnectivity;
- Real-time operation (for control and dynamic analysis purposes);
- Decentralization of decisions.
Typically many dozens of processes and sub-processes are looked at in detail, but little attention is given to the organization’s “environmental” conditions.
(3) The holistic approach, for its part, recognizes that qualifying technological or process advances is not sufficient. A company’s digital maturity will vary depending on two interrelated dimensions: its digital intensity (technologies and processes) and its digital culture. The ability to harness the potential of a vast sum of data in real time depends on the organizational structure and culture, which also need to be changed. Ultimately, the company must become a learning and agile entity, able to continually, quickly and flexibly adapt to a constantly changing environment.
While measuring the digital intensity evaluates your use of cutting-edge digital tools (to interact with clients, partners or suppliers), automated data collection tools (to speed up decision making) and business process digitization and integration tools (for interoperability), evaluating the digital culture will assess whether “winning conditions” are in place, that is, a digital vision, support from management, an environment which values experimentation and collaboration, the planning of professional projects, and the ongoing development of skills.
For our part we prefer the holistic approach (No. 3) and we have developed our own (adapted from the Acatech model – www.acatech.de – the result of an important project piloted by the German National Academy of Science and Engineering, which included a project group with 5 Ph. Ds, 21 project partners, the consultation of 32 industrial and academic experts, and financing from 10 major industrial firms).
Our unique process is supplemented with a proprietary technology selection tool (of the 1.b type described above).