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Abstract
Digitalization, nowadays both a widely used buzzword and a ubiquitous
paradigm, requires a rethinking of existing business processes, models,
and approaches. In almost every business sector, be it commercial,
non-profit or governmental, organizations that are highly digitalized
show significant advantages and displace their traditional competitors
from the market. For companies that seek to digitalize their business,
it is necessary to first understand their current digital maturity. Un-
fortunately, there is no single established metric for assessing this, but
a large variety of different measures exists, each of which captures cer-
tain aspects of digitalization, such as the communication channels or
the use of social media, but ignores others. Furthermore, existing digi-
tal maturity models do not typically address the specific needs of small
and medium-sized enterprises (SMEs) that, for instance, are looking
for a benchmark among their regional or local competitors. This pa-
per aims to address these problems by introducing a comprehensive
digitalization check that takes the specific characteristics primarily of
SMEs into account, therefore reducing the entrance barrier for deal-
ing with digitalization. Once completed, the check offers advice in the
form of an annotated radar chart.
Keywords: Digitalization, Digital Maturity, Digital Transformation,
Disruption.
1
1 Introduction
Digitalization and the digital transformation have nowadays, in particular
due to COVID-19, entered mainstream interest, since traditional business
processes and models often lose their relevance when attacked (disrupted) by
new digitalized market players. A typical example is the taxi industry which
in the gig economy has been disrupted in many parts of the world by the
likes of Uber, Lyft, or Didi Chuxing. These new market participants disrupt
established competitors by exploiting their significant advantages regarding
costs or service level using a platform approach. Customers are trying to
avoid pain points when doing business with a company and will often choose
more digital competitors since this typically means more streamlined busi-
ness procedures, more transparency, and more do-it-yourself opportunities.
This paper describes a digitalization check (or D-Check for short) intended
to help in particular small and medium-sized enterprises (SMEs) determine
their level of digital maturity and compare themselves with their regional or
local competitors, while at the same time providing hints on improvement
at points where the level achieved is not yet satisfying.
Nowadays, the question is no longer whether a company should start its
journey into digitalization and the digital age, but where to start a digital
transformation process, which steps to follow, and which goals to achieve.
As a preparatory measure, one should always assess the current digital ma-
turity of a company, as it allows the creation of a goal-oriented action plan
and subsequent measurement of progress. To this end, we have performed
an extensive literature study which has revealed a total of seven key digital
dimensions (see Section 3). These dimensions have given rise to a maturity
model that can capture the current digitalization status of a company. Being
aware of their digital maturity, companies know where to start, where their
strengths lie, and where they require improvement in order to cope with their
digital transformation. Companies can, for instance, identify potential op-
portunities and underutilized capabilities and digitalize or optimize business
processes.
Previous approaches to determine or measure a company’s level of dig-
italization have either focused on particular business fields or on specific
aspects of digitalization, such as an analysis of the company’s social me-
dia communication, but do not provide a bird’s eye view on the respective
needs. In the non-academic context, there is a variety of digitalization readi-
ness checks that also use a survey for employees of the company. However,
their maturity model, theory, and evaluation are not publicly available.
Our contribution in this paper is the specification of a comprehensive
and dynamic measurement instrument for assessing the digital maturity of
a company, which offers a high degree of flexibility for the consideration of
important business aspects and, simultaneously, is unique in the field. Com-
panies are usually very different from each other. Due to this diversity, it is
2
remarkably difficult to validly measure and compare their digital transfor-
mation progress. In contrast to existing approaches, our D-Check captures
digital maturity using seven digitalization dimensions and a dynamic broad-
based survey. The D-Check offers a weighting option for all dimensions.
This allows more accurate results and, at the same time, a tailoring to a
company‘s needs. Thus, it can trigger action in areas where that is needed
more easily.
The remainder of this paper is organized as follows: We examine relevant
related work in Section 2 and show to what extent it has influenced our
approach. Section 3 describes our maturity model and its seven dimensions
in detail. Then, Section 4 introduces the actual D-Check in the form of a
survey. Section 5 shows how we evaluate the answers given to our D-Check
and provides sample applications and a case study of the D-Check with
evaluation, classification in the maturity model and implications that can be
derived from the survey. Finally, Section 6 concludes the paper and offers
future research opportunities.
2 Related Work
Substantial work has already been conducted in the context of maturity
models for digitalization. According to the statement “if you can’t measure
it, you can’t manage or improve it” a large number of quantifications for
digital transformation has already been derived1 .
Many consultancies have created their own concepts. For example, McK-
insey has derived the concepts of the Digital Quotient, the Digital Disruption
Index as well as the Digital Capabilities benchmark to advise clients in dig-
italization topics (McKinsey & Company 2019). But also, some challengers
like the Boston Consulting Group have invented the Digital Acceleration In-
dex (Boston Consulting Group 2019), which is trying to assess the digital
maturity of their customers. Forrester Research has designed a general matu-
rity model that includes four dimensions and four levels of maturity. Their
Digital Maturity Model 4.0 can classify companies as Skeptics, Adopters,
Collaborators or Differentiators (Gill and Boskirk 2016).
Gartner has introduced its Gartner L2 Digital IQ Index, which focuses
on digital brand performance (Gartner 2019). Other consultancies have
specified an index on the digital performance of major companies in a spe-
cific country, like the Accenture Digital Index Switzerland (Accenture 2019).
However, while these consultancy approaches might be sufficient for a first
1
This statement is mostly related to Lord Kelvin and Peter Drucker. William Thomson,
1st Baron Kelvin, (1824–1907) was an Irish-Scottish mathematical physicist and engineer
(Wikipedia 2019a). Peter Ferdinand Drucker (1909–2005) was an Austrian-born Amer-
ican management consultant, educator, and author, whose writings contributed to the
philosophical and practical foundations of the modern business corporation (Wikipedia
2019b).
3
workshop, they are unsatisfying from an academic perspective because they
often use a brief, simple and fuzzy statement collection that is inappropriate
for the massive complexity of digital transformation. On the other hand,
many researchers have attempted to encounter the challenge of describing
digitalization by bringing up a wide range of measurements. This might be
related to the fact that digitalization is multidimensional, complex, and still
not clearly defined. For this reason, we provide a brief overview of related
work as well as a deeper understanding of digitalization to highlight the
conceptual differences of our D-Check maturity model.
Certain maturity models in the literature are for a specific industry, e.g.,
Canetta et al. (2018) have created a digitalization maturity model for the
manufacturing sector and have explored the related state of the art. De Car-
olis et al. (2017) have built a fundamental scoring method for manufacturing
companies that want to assess their digital readiness. Cleven et al. (2014)
have focused on the healthcare sector by introducing a maturity model for
hospital processes that also considers IT aspects. However, at a closer look,
such sectors reveal enormous heterogeneity, which is not handled suitably by
these approaches. Mettler (2011) has described the development of maturity
models in general. Other researchers have focused their work on a subtopic
of digitalization, like Big Data (Al-Sai et al. 2019; Comuzzi and Patel 2016),
Knowledge Management (Jochem et al. 2011) or Industry 4.0 (Felch et al.
2019; Lichtblau et al. 2015; Schallmo et al. 2017). Others have selected
a specific digitalization dimension as their research domain. For instance,
Proença and Borbinha (2018) have reviewed the literature regarding matu-
rity models that deal with data and information management, while Looy
(2010) has performed a study on maturity models for business processes.
The University of St. Gallen has pursued a hybrid research approach
that combines a literature review and a series of expert interviews with se-
nior executives (Berghaus and Back 2016). Based on the results, they have
derived the nine-dimensional Digital Maturity Model and validated it with
the help of two focus groups. Hölzle, et al. (2019) have extended this ap-
proach by adding a work system framework to combine its strengths with
technology and business environment driven aspects. Based on a survey,
seven dimensions of digitalization are measured and evaluated for a self-
assessment, which is considered to be practical and tailored to the needs
of small and medium-sized businesses. However, like manufacturers, SMEs
are quite heterogeneous. Thus, it is necessary to adapt the set of questions
to the company’s properties, e.g., a trades person has completely different
requirements than a retailer.
Besides English publications, there is also an intensive exchange in the
corresponding German literature. Keese (2016) describes five aspects of digi-
talization, namely the degree to which a product accesses analogue or digital
methods, the degree to which a product is connected to its environment, the
way products communicate with their users, the degree to which processes
4
are adapted to the digital possibilities and the degree to which new business
models are taken up which can only be implemented with digital technology
and were formerly simply impossible. In contrast to this general perspective,
Appelfeller and Feldmann (2018) have introduced a maturity model that is
inspired by a value chain of a purely digital enterprise. They have identified
ten value chain elements, where for each of them the degree of digitalization
is mapped to a specific maturity level based on a set of criteria. Out of these
interim results, a final scoring is calculated. Bley and Schön (2019) also state
that former maturity models are too general and suffer from a wide range of
shortcomings. Therefore, they propose a combination of static and dynamic
maturity model components. There are other approaches with certain ad-
vantages and limitations, but we omit a detailed description of these, as they
do not contribute new aspects for our study.
For the baseline of the D-Check, we have identified the Processes, Data,
and Business Model dimensions as the three main dimensions for digitaliza-
tion. We recommend taking this finding into account by choosing propor-
5
tionate weightings in the D-Check evaluation. Keese (2018) also mentions
the connectivity of products with their environment and users. Appelfeller
and Feldmann (2018) extend this to the connectivity of machines, employees,
IT systems and more. Inspired by them, we have included the Connectivity
and Interaction dimensions into our maturity model. Finally, Optimization
and Disruption are two additional measures to describe the digital maturity
of a company. Optimization refers to the never-ending challenge of digital-
ization, since a company has to constantly improve and optimize their digital
capabilities in order to stay competitive in comparison to the other market
participants. Not only are competitors within the same sector important,
but digital disruption can also destroy entire business models and bring up
completely new challenges to a company. Consequently, we have included a
Disruption dimension in our maturity model. Certainly, there are dependen-
cies between some of these dimensions since companies commonly represent
a structured organizational unit. Nonetheless, for the radar chart that we
propose, we assume that the dimension values are independent of each other.
Figure 1 shows an overview of our seven digital dimensions. The following
introduces the dimensions and their levels in detail.
3.1 Processes
Processes include all operational procedures that contribute to the value
creation that fulfils the business model of the company. In the context of our
maturity model for the D-Check, dimension Processes describes the degree
to which processes are executed in a digitalized way. Manual processes using
pen and paper will lead to a lower maturity level in this dimension. In
contrast, a paperless office will have a higher ranking. However, there are
gradations between these two extreme cases. Processes are fed with existing
data and their execution generates new data. Therefore, processes and data
are closely related. For this reason, the Data dimension is another important
part of our maturity model.
3.2 Data
Data is omnipresent in companies. Several components like operational
databases, ERP, CRM or workflow management systems constantly gen-
erate a large amount of data. This data has to be stored in a systematic and
structured way so that processes can make use of it. The Data dimension
measures two aspects: On the one hand, it quantifies the share of data that
is available in digital format. On the other, the various levels encompass
a description of the degree to which the data are stored centrally and har-
monized with one another. Processes and data together can describe the
functioning of a business. However, to understand the complete picture and
value chain, one needs to understand the business model of a company.
6
3.3 Business Model
Business models answer the question of how the value creation of a company
leads to revenue. There are different approaches for describing business
models. Schallmo et al. (2017) proposes that business models include five
dimensions with each of them including specific elements of the business
model. Another well-known approach to capture the business model of a
company is the Business Model Canvas (Osterwalder and Pigneur 2010) that
covers even more aspects. However, we do not want to assess the business
model as a whole. To keep our D-Check lean, we have chosen to only apply
the understanding of a digital business model introduced by Keese (2018).
Therefore, the Business Model dimension in our maturity model relies on the
degree of dependency, especially, on information technology as one indicator
for the digital maturity. This characteristic summarizes the extent to which
an enterprise exploits its digital opportunities.
Besides Processes, Data, and Business Model we have identified four
secondary dimensions that characterize the digital maturity of a company,
which are introduced in the following subsections.
3.4 Connectivity
The Connectivity dimension describes a variety of information and commu-
nication channels of a company. In addition to internal information flow,
this dimension also considers all channels directed towards external stake-
holders along the value chain. Examples of such channels could be customer
interaction channels (e.g., social media, chat, email), information exchange
channels between departments or the use of IoT to exchange data with ma-
chines. This dimension also measures how many elements of a company are
digitally connected to each other and external parts of the value chain. Hav-
ing more communication channels available will lead to a higher maturity
level in this dimension, even if the company is not actively exploiting them.
3.5 Interaction
Interaction is closely related to connectivity. The Interaction dimension of
our maturity model measures the intensity with which data is exchanged
over the available information and communication channels. In that sense,
it describes the utilization of the connected infrastructure. Unlike for the
Connectivity dimension, having many communication channels will not im-
prove the digital maturity level in the interaction dimension. It is possible
that a company with fewer channels, but a more intense use of the avail-
able ones has a higher score in this dimension than a company with more
channels, but a lower usage.
7
3.6 Optimization
The Optimization dimension especially measures the realization of optimiza-
tion potential regarding digitalization. It describes the business activities of
continuously changing, adapting, and improving all things that lead to a
higher level of efficiency and effectiveness. Therefore, this dimension identi-
fies the amount to which a company exploits the opportunities for optimiza-
tion considering the current technical possibilities and the state of the art
in their field of business. Some examples of optimization methods include
search engine optimization, analysis of campaign effects, or prediction mod-
els. There are manual, semi-automated, data-based and fully automated
optimization techniques that are considered in our D-Check.
3.7 Disruption
Despite all the digital factors already discussed, a company could lose its
market relevance through disruption. Disruptive innovation describes a pro-
cess by which a product or service takes root initially in simple applications
at the bottom of a market and then relentlessly captures the market, even-
tually displacing established competitors (Christensen 2019). Hence, the
Disruption dimension considers the endangerment of the company structure
by a sudden, digital change of the core business. The assumption here is
that the more a business model relies on digitalization, the lower the risk for
(digital) disruption. Generally speaking, it provides an estimation of the risk
(arising from digital technology) for the current business model. It does not
offer a protection of being disrupted. We note the disruption can be both
positive and negative in general; yet we here focus on the latter.
8
4 Composition of the Survey
We have established an online survey that is accessible by anyone inter-
ested2 . In this survey, we provide statements for each of the dimensions
of our digital maturity model. Additionally, there are branch-specific state-
ments which may allow calculating an industry-specific maturity score. Users
of the D-Check have to provide the degree to which she or he agrees with
a given statement, where the degree of agreement ranges from Does not ap-
ply to Applies totally on a symmetric five-step Likert scale to avoid biased
responses. Finally, it is possible to select an I do not know option to not
enforce an answer.
Before a user can jump into the questions, we ask for the branch or area
in which the respective company is active, the size of the company, and the
position of the person who is answering. Based on this information, we filter
out some of the statements in our catalogue, as they do not apply to every
company or to an employee who does not have the insights to answer them
reliably. Currently, the D-Check distinguishes between banking, insurance,
craft, healthcare, and several other branches as well as micro, small, medium,
and large enterprises. Furthermore, a slightly different set of questions is
asked depending on the position in the company, e.g., top management or
staff.
9
Figure 2: Sample Statements for Partial Capturing of Digital Maturity.
10
Table 1: Sample Maturity Scores.
Maturity
Dimension Weight Score
Processes 5 2.08
Data 3 1.44
Business Model 2 2.77
Connectivity 10 1.46
Interaction 10 3.33
Optimization 10 3.00
Disruption 5 2.78
Total Maturity 2.49
Figure 3: Radar Chart for Dimension
Levels.
11
Figure 4: A Comparison of a Traditional Insurance (left) and an Online
Insurance (right).
12
Figure 5: Companies’ Locations in our Case Study.
for action and plan their next steps to become more digital. In some cases,
there may be limitations to that. A traditional insurance company with
branch offices cannot fully digitalize their business because they would be-
come superfluous. One of the advantages of a traditional insurance firm is
personal contact to the customer. Thereby, the human factor plays an es-
sential role for people that do not want to buy insurance products via the
internet but instead wish for a face-to-face consultation. To sum up, for
some companies the state of being fully digitalized is not desirable to reach.
The responsible managers then have to carefully decide on which dimen-
sion of digitalization they plan to take action or which goals they would like
to achieve.
Another issue that becomes evident in this example is the fact that the
freely selectable dimension weightings have a considerable impact on the
total digital maturity of our D-Check. Nevertheless, the weighting property
ensures flexibility, which allows precise tailoring to a company’s needs. To
assist the user in this essential step, we suggest a set of default settings based
on the enterprise characteristics, but in the end this weighting adjustment is
left to the users, who have the best knowledge of their company’s needs.
13
the highest achieved dimensional level. Companies have performed worst in
the Optimization dimension, with a median of 1.51. This could be due to
the properties of the questions in this dimension. Optimization techniques
in marketing, like search engine optimization or a target analysis, are not
typical for SMEs. Figure 6 presents boxplots of the achieved total digital
maturity and in the seven digital dimensions for all companies.
The conducted survey shows a weak positive correlation between com-
pany size and its digital maturity. Manufacturing and logistics companies
have the highest, while industry companies have the lowest digital maturity.
We also discovered some rather unexpected findings: For instance, a build-
ing enterprise has focused on digitalization for several years and achieved a
result of 3.18. The company operates in a rather non-digital business field,
and stands out through, e.g., offering a digital recruitment process, a do-it-
yourself estimation of costs and digital communication opportunities for its
customers.
14
requirements that have to be met when dealing with today’s business world.
Nevertheless, we conclude that they have to seek for more digital leads.
6 Conclusion
We have described a check for digital maturity that we have developed as
the result of studying (and criticizing) a number of previous proposals. We
emphasize seven dimensions in our D-Check. As previously mentioned, we
assign default weights to these dimensions, but anyone applying the check
can fully customize these weights according to his or her needs or perception.
The proposed D-Check is generic enough to apply to a variety of branches and
company sizes. At the same time, it suits the needs of SMEs and adapts to
branch particularities, company sizes, or positions of the responding person.
As shown, the underlying maturity model worked well in our sample
scenarios and our larger study. We have performed a cross-industrial assess-
ment with companies of different kinds to determine whether the results of
the D-Check are consistent with the reality perceived by persons with digital
knowledge or IT background. We conclude that our D-Check can capture
the digital reality for a large share of enterprises. The results of taking the
D-Check can be used as the basis for digital transformation, for preparing
a company for future challenges, or at least for obtaining insight into what
the modern digital world is changing in traditional businesses. These results
can create a digitalization benchmark for a region that enables companies to
get a deeper understanding of how they perform compared to their branch
or regional competitors.
As future work, we plan to add personalized and automated recommen-
dations to the D-Check evaluation based on dimension importance and best-
practice results. These recommendations will allow companies to see how
they should react to achieve quick wins regarding their digital maturity. We
also plan to "regionalize" the D-Check so that it can be applied by admin-
istrative institutions to enterprises in their region.
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