Sabine Berghaus MCIS, 06.09.2016

Stages in Digital Business Transformation Results from an Empirical Maturity Study

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Problem statement

• Digital innovation can be perceived as threatening andinvolves transformational changes. (Yoo et al. 2010)

• Companies struggle with recognizing and understandingthe impact and chances of digitalization. (Matt et al. 2015; Carlo, Lyytinen & Rose 2012)

• To initiate a digital transformation program, managersneed to understand the current status and capabilities oftheir organization.

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What are typical transformation stagesand what does this tell us about howorganizations prioritized different coursesof action?

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Digital Maturity Model

Digital Maturity Model consisting of 9 dimensions1.

Online survey with 60 itemsand 5-point Likert scale.

1) Berghaus, S., Back, A.: Gestaltungsbereiche der Digitalen Transformation von Unternehmen: Entwicklung eines Reifegradmodells. Die Unternehmung. 70, 98–123 (2016).

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Calculation of Maturity Stages

• Usage of Rasch algorithm: Depending on the answersof all participants (N=547 participants / 417 companies) a metric is calculated for each item, that represents thedifficulty.

• Using cluster analysis we group items of similardifficulty into the five maturity stages.

easy difficult

Item 1 (I1)

Item 2 (I2)

Item 60 (I60)

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Findings

Stage 1 – Promote & Support

Examples for items in this stage: Digital transformation as continual strategic change project. High value of digital business in overall strategy. Top management recognizes the importance of digital business. IT department ensures relevant digital technologies.

Stage 1: Organizations promote digital transformation withinthe organization and support respective projects by providingressources and infrastructure.

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Findings

Stage 2 – Create & Build

Stage 2: Organizations experiment with digital innovation in both internal processes as well as product offerings.

Examples for items in this stage: Systematically evaluating potential in new technologies. Promote digital innovation. New digital ideas or business models implemented. Regularly check core processes for improvements.

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Findings

Stage 3 – Commit to transform

Examples for items in this stage: Digital expertise as core component to develop employees. Organizational ability to react quickly to changes. Partner network for digitization activities. Automate routine processes. Readiness to take risk with existing business.

Stage 3: Transformation of company culture andorganizational structure accompanied by a systematictransformation management.

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Findings

Stage 4 – User-centered & elaborated processes

Examples for items in this stage: Customers included in the development of new product ideas. Digital content designed according to individual user‘s situation. Periodically review transformation goals. Data analysis results guide possible actions and strategic decisions.

Stage 4: Focus on customer needs by personalizingcustomer experience as well as improving internal processes.

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Findings

Stage 5 – Data-driven enterprise

Examples for items in this stage: Transformation goals are defined measurably. Customer and interaction data collated across different channels Expenditure planning for communication based on media usage. Real-time data analysis.

Stage 5: Collection, analysis and sense-making of cusotmerdata in business processes.

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Calculating maturity scores for organizations

Point maturity scoreOverall fulfilment of items

Cluster maturity scoreSequential fulfilment of itemsin the clusters.

Overall maturity scoreAverage of point maturity andcluster maturity score

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Distribution of overall maturity scores

Maturitystage 1

Maturitystage 2

Maturitystage 3

Maturitystage 4

Maturitystage 5

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Analysis within the dimensions

37%

51% 45%46%

56%41%

47%

47%

47%

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Discussion & Contribution

What can we learn from low maturity stages? Digital commitment an affinity among employees areimportant prerequisites that often preexist within theworkforce.

What does the overall order of items tell us? Digital transformation seems to be intuitively managedrather than strategically planned.

What can we learn from high maturity stages? The use of digital data requires more strategic collaborationbetween IT and business -> facilitate networkedcollaboration in the company.

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Thank you!Feedback?

Sabine BerghausResearch Associatesabine.berghaus@unisg.ch

Chair Prof. Dr. Andrea Back www.aback.iwi.unisg.chLinkedIn: https://ch.linkedin.com/in/sabineberghaus@stadtnomadin