It’s time to grow up and stop playing with the business beginners

“The Advantages of Digital Maturity“, a paper recently released by researchers at the MIT Sloan School of Management, looked at how different businesses adopted technology and the effect this had on their profits.

The authors of the paper, George Westerman, Didier Bonnet and Andrew McAfee, defined “digital maturity as a combination of a company’s level of technology investment and the management skills to implement that technology”. From this they classify businesses into four categories – the beginners, conservatives, fashionistas and digerati.

Wallowing in the bottom right are the beginners, who have little idea of how to use technology and, as a consequence, don’t apply tech to their business. While they’ll use computers and will almost certainly use tools like ERPs and accounting software, they won’t implement them beyond their immediate needs.

This could describe thousands of big and small businesses who have learned just enough to do what they need but don’t really understand, or care, about what their IT systems can do for the way they work.

Above the beginners sit the fashionistas, the businesses who like shiny tech things but don’t really have a strategic understanding of technology or how to apply it effectively. As a consequence, the digital tools are underused and fashionistas don’t use them much more effectively than the beginners.

More effective users of technology are the conservatives and digerati, the latter are like the fashionistas except their managements understand how to integrate technology into their business.

The conservatives are probably the most typical business, slow to adopt new technology but when they do, the management ensures it is used effectively.

Of the four groups, MIT’s researchers found that the digerati and conservative categories earned between 9 and 26% more profit than their peers.

The use of technology makes a difference as well, with the fashionistas getting a 16% better return on assets than the conservatives – which is something worth noting about the adoption of tech in a business.

What the researchers concluded was that businesses who aren’t adopting technology are falling further behind in skills as well as profit, noting that attaining ‘digital maturity’ takes several years.

It’s worthwhile reflecting on how digitally mature your business is and reviewing exactly how you’re using technology in your organisation. With the tools available for today’s business, there’s no reason to be playing with the beginners.

Paul Wallbank is one of Australia’s leading experts on how industries and societies are changing in this connected, globalised era. When he isn’t explaining technology issues, he helps businesses and community organisations find opportunities in the new economy.