How will maturity impact your bottom line: the quantitative perspective using technology

Intuitively, we tend to think the scrappy start-up company with a low level of corporate development, also known as“maturity”, in its operations will be motivated to grow faster than a more established firm. This thinking naturally lends to the conclusion that maturity would not necessarily correlate with a healthy top and bottom line. However, our series of posts will cite a growing body of research to demonstrate that the opposite is true: a company with a higher level of maturity across different operational dimensions will likely also have better financial performance.

In this first post we look at technology. Deloitte Consulting publishes an annual study that investigates what they term as “digital maturity” and its impact on companies’ financial performance. The results show us that better integrating technology and digital tools, signifying higher maturity, will very likely bring greater positive financial impact. When measured by 2 key metrics: net profit margin and net revenue growth, 43% and 45% of firms with higher-maturity in digital transformation significantly outperform the industry averages.

Upon closer examination, we can see that maturity in utilizing digital tools can boost the bottom line by positively improving some key operational functions. A more digitally developed firm will be able to provide higher quality service with a smoother customer experience, increased efficiency in its operations, better employee engagement through reskilling and upskilling, as well as higher customer satisfaction.

However, this does not mean companies should rush in and spend blindly to invest in digital transformation, as a company may already be mature in certain areas and only needs development in others. A balanced approach is recommended so that companies can invest in key digital pivots and improve both the technological integration and business model innovations that can take full advantage of the latest technology . It is therefore extremely important to benchmark a company’s maturity and current model against industry standards and best practices: technology integration is about more than buying additional software or installing more servers. Successful strategies should consider using digital tools to transform and improve workflows, customer journeys, internal organizations as well as stakeholder relationship management. Learning the best practices from industry leaders on specific digital pivots will enable a company’s management team to design and implement technology integration with greater confidence and acquire better results.