– In this article we discuss the 4 stages of digital maturity we have discovered in DANAConnect during 15 years of automating communications for banks and insurance companies –

Nowadays, it seems that digital transformation is “no longer optional”, so it’s strategic to know where your company stands on the road to digital maturity to be able to move forward.

As market forces drive organizations to adopt new business practices, the complexity of an organization’s transformation project varies according to its digital maturity. Hence, the first step to achieving such initiatives is to determine your digital maturity using digital maturity model frameworks.

With the help of digital technologies, businesses are now able to redefine how they operate, but your digital maturity determines whether you can succeed in that endeavor. 

The first step to implementing digital transformation initiatives is to determine your digital maturity. Therefore, organizations and companies use frameworks called digital maturity models.

What is digital maturity and why is it important?

Adapting to and responding to disruptive technological trends is what digital maturity means to an organization. 

During this process, organizations transform their existing business processes to improve their potential for growth and run more efficiently than before.

What Digital Maturity is not

Technology or cutting-edge features do not define digital maturity. And neither does it depend on your technology investment. So even if you invested thousands of dollars in new systems, if your employees don’t use them because they find it too complicated, then you’re not on the path to digital maturity. 

What is a digital maturity model?

Digital maturity models serve as a valuable tool to guide a clear path during the digital transformation process and provide a framework for:

  1. Know where you stand in terms of digital maturity at a given time
  2. Create a roadmap for your digital transformation

The 4 stages of digital maturity DANAConnect has discovered

In helping over 200 financial institutions and insurers achieve digital maturity, DANAConnect has learned that to do digital, go digital, to be digital, there are a number of steps to follow.

To move forward in your digital transformation journey, you need to understand where you are now. Then, making the right decisions enables you to survive in the digital world and maximize the potential.

Digital Maturity Stage 0 : Companies that are still on paper

The 4 stages of digital maturity: Paper LedWe have considered the zero stage for digitalization because there are many companies still in this stage and, as we have witnessed during the pandemic, they were recently forced to revisit their “business as usual” strategy.

These zero-stage companies manage all their processes still on paper. They may have a simple informative website as their sole digital channel, but aside from that, they are all brick and mortar. They rely primarily on call centers for communication with their customers, and they are the ones who were hit the hardest by the pandemic. 

Since their customers are baby boomers and digital resisters, they didn’t feel the need to go digital until they were isolated, mainly during the first months of confinement in 2020 when call centers had to shut down. Their operations utterly collapsed.

In this Stage, businesses lack trust in digital systems, are afraid of scams and phishing, and departments struggle to collaborate due to resistance to change. Stakeholder engagement and executive buy-in are essential for moving forward and away from this stage.

The first steps towards digital transformation for a zero stage company must include:

  • Collecting their customers’ email and mobile numbers to achieve contactability
  • Engage and educate their staff about the benefits of becoming digital in the long term
  • Study technology enablers in the market and search for tools that adapt to their initial needs but lets them scale in the future 
  • Redefine process to adapt to digital channels 

Stages of digital maturity -> Stage 1:
Companies with communications led by IT

The 4 stages of digital maturity: IT Led

Many companies that approach DANAConnect for the first time are in this stage. As the company begins to invest in technology and maximize its in-house resources, they turn to the IT department. Therefore, the IT department becomes increasingly essential.

The technological tools they start investing in are purpose-oriented and task-oriented. As departments such as billing and collections used to send communications and documents on paper, by direct mail or courier, these documents are now converted into digital format as they were, to be sent by email, probably in PDF format. 

They start emailing customers by connecting the applications that generated those PDF files to an in-house SMTP server. It is only a matter of time until this becomes a considerable problem because big email platforms like Gmail, Hotmail, and Yahoo, start labeling them as spammers. The more their customer base grows, the more issues of this kind the company will have, and the fewer customers will receive emails from them. Problems of this kind diminish growth and can harm customer satisfaction.

The next steps towards digital maturity for a Stage 1 company  must include:  

  • Start using third party bulk email services to assess and increase their contactability
  • Start using other channels than email, like SMS, WhatsApp and Messenger
  • Keeping their contact data clean and updated, including secondary channels
  • Collecting customer’s data through reliable and structured digital sources and not by phone or paper
  • Using validation email services to keep out of black lists
  • Review their process to get out of the paper paradigm

Stages of digital maturity -> Stage 2:
Companies with communications led by each department

The 4 stages of digital maturity: Department LedOnce the first stage is left behind, improved data quality becomes the foundation for testing and improving new digital technologies as departments within an organization become more connected.

Each department aligns with the IT department to have its own resources. One of the ways in which IT satisfies their internal customers is by using functional tools, like investing in an email marketing campaigner for the marketing department. This is well suited to use for one-shot marketing campaigns, on a short-term basis. 

At this point, the challenge is to evolve from managing a specific project or manually managing campaigns to figuring out how to implement process-driven end-to-end automations that can run completely on their own.

Another big challenge at this stage is that the function-oriented tools keep the data enclosed within each department. As a result, information flows up and down within silos without being shared with other departments. Information silos limit business growth and efficiency. By keeping silos separate, the company ends up duplicating efforts, data, infrastructure, missing opportunities and multiplying cost.

Another way the company suffers from duplication is the chaos created by contacting the customer from every department without restrictions and no governance. Again, this affects the customer experience and satisfaction and also has implications in compliance.  

Incorporating cross-channel technologies and utilizing APIs to integrate other systems the company is already using is also a crucial step in breaking down these silos. These integrations allow the flow process to seamlessly move from one channel to another to ensure the correct information is made available to the right people, at the right channel, across the whole organization, and meet the customer’s requirements. In this way, you could set up automated processes so that when your customers request a self-served document via WhatsApp, they receive the information they asked for by a more suitable channel like email. At the same time, executives are notified through helpdesk, or CRM ticket, or even SMS, in the case of a more time-sensitive matter.

The next move towards digital transformation for a stage 2 company must include:

  • Start mapping your company’s current process flows to analyze them and create a detailed process map.
  • Create a campaign to raise awareness throughout the company, focusing on how to break apart organizational silos and promote cross-functional management.
  • Select a unified cross channel customer communication platform to be able to centralize the data.
  • Create new end to end process workflows.
  • Create transversal agile teams and process owners. 

Stages of digital maturity -> Stage 3:
Companies with governance over customer communications

The 4 stages of digital maturity: Governance LedIn general Corporate governance provides the framework for attaining a company’s objectives. It is the only way to balance the interests of a company’s many stakeholders, including the government. For customer communications governance signifies that 

Companies that have arrived at this point have achieved unified communications, governance, cost reduction, and system integration. All this gives them a seamless way to talk to their customers.

At this stage, business processes start to see that data-driven directly impacts revenue generation and productivity. 

A common error that we have seen in many companies that approach for the first time that are at this stage, is that they tried to achieve governance using a Business Intelligence platform to centralize data and intermediate between the other applications used by each department. Rather than simplify and reduce costs, this only adds another layer to manage. The difficulty is amplified by the number of applications that must be integrated to each other, and this becomes like a Frankenstein’s monster. It takes a lot of money to maintain this monster system, not only in terms of license investment, but also in terms of employee hours.  

Moving forward the stages of digital maturity to have a digital workforce must include:

  • Incorporating customer feedback 
  • Fully reengineering processes end-to-end, if necessary to reduce total steps to adapt to a same day delivery customer culture.

Stages of digital maturity -> Stage 4:
Companies with a digital workforce

The 4 stages of digital maturity: Digital WorkforceThe high expectations of today’s customers have forced companies to digitize their business processes faster. However, they must go beyond automating existing processes. As part of the process redesign, they need to minimize steps and documents, develop automated e-closing solutions, while dealing with compliance and security.

In the long run, digitizing information and automating step-intensive processes can result in cost reductions of up to 90 percent1, and accelerating turnaround times to satisfy the same day delivery customer’s culture. 

At DANAConnect we work with a few financial organizations that are in this stage. At this point cross-functional collaboration is well established and the entire corporation is focused on technologies that activate business opportunities. In regards to digital and data technologies, everyone speaks the same language and identifies common goals.

They place equal emphasis on technological and organizational development as well as improving incremental efficiencies.

At this point business processes and IT are driven by customer needs and digital channels. Companies at other stages may still have product-focused or sales-focused cultures, while customer-centricity is considered a priority only for some functions, like marketing. At this stage employees at all levels have a customer centric approach.

Also, companies with digital workforces have optimized their operations across multiple channels through cross-channel delivery as a standard method to improve operations. These channels go beyond marketing and sales into processes that cross the organization. 

Organizations achieve a higher level of performance with the ability to source structured online data with offline data.  Efficiency is achieved through data-driven insights that are available to all teams and efforts that need them. 

As a measure of effectiveness, conversions at these companies take precedence over click-through rates or open rates.

When done right, having a digital workforce can bring significant benefits

McKinsey & Company provides numerous examples spanning a range of industries:

  • A bank that digitalizes the mortgage application process has up to a 70 percent cost reduction and a 60 percent reduction in preliminary approval time, which reduces the time it takes to obtain a mortgage to just one minute.
  • An insurance company that automatically settles and e-closes a large portion of their simple claims using, thereby offering better customer service, reducing operating costs, and lowering premiums.

Transformation strategy maturity

Understanding your digital maturity is essential to a strategic approach to digital transformation. As the barriers to digital entry shrink, new technology companies are offering a variety of IT services and capabilities to facilitate digital transformation. Similarly, organizations increasingly need to improve the quality and reliability of their digital information and technologies.

By improving your digital maturity, business organizations can prepare for the disruptions set to occur due to the prevalence of digital trends and improving transformation capabilities of their competitors.

How Does Your Company Achieve Digital Maturity?

Achieving greater digital maturity involves five steps: 

  1. Analyze your digital maturity a this moment
  2. Get leadership’s buy-in
  3. Organizational restructuring is needed 
  4. Create a digital transformation strategy
  5. Start with a small process

 

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