Measuring digital maturity of organizations in the H&T industry of Sri Lanka

Digital Transformation is a process of using digital technologies to create new business or modify existing business processes, culture, and customer experiences to meet changing business and market requirements. Digital Maturity (DM) is the measurement used to access the degree of adoption and application of digital technologies in an organization. The mostly applied model for measuring DM has two dimensions: digital capabilities and leadership capabilities, and it divides the organizations into four quadrants, however the boundaries of the quadrants are not defined. Also the model is not capable to measure the DM quantitatively.

The literature revealed that the DM of an organization may depend on the Digital Literacy (DL) of internal and external stake holders, but the existing models do not contain DL. This study aims to develop a conceptual model and a mathematical model to measure the DM of an organization.

The theoretical lenses are ‘Dynamic Capability (DC) theory’ and ‘Vector Space’. The DC perspective helps to understand how firms are created, organised, and grow; how they innovate and compete; and how managers manage facing the uncertainty in the business world. Vector spaces are characterized by their dimensions. A vector space consists of a set V, field F and two operations: vector addition and scalar multiplication.

The study identified three dimensions of DM: Digital capabilities (X), Leadership Capabilities (Y) and Digital Literacy of employers/ employees (Z). The variables X, Y and Z are functions of several other variables. Firstly we developed a conceptual model to measure the DM and then used the properties of vector space to measure the DM quantitatively.

The developed mathematical model, named 3D-Digital Maturity Model (3DDMM) will help organizations to understand their position with respect to each capability as well as the aggregate capability within or between industries.