Digital Maturity: Taking the Next Step in Digital Transformation

Some companies view digital transformation as a one-time activity, but the reality is that digital transformation is never-ending, but it does not mean that there are no nodes in digital transformation. You can evaluate the current digitalization process of the organization, whether everything inside has been digitized and optimized, and whether the software portfolio is consistent with the company's digital transformation vision.

Next, let’s look at the stages of digital maturity and think about how companies can expand digital transformation outward.

Stages of digital maturity

We need to change the way organizations think about digital transformation in order to remain competitive and relevant to society. It is not enough to simply carry out digital transformation within an organization. Here are the four stages of digital maturity:

1. Change the way internal processes are managed

2. Expand digitalization outward

3. Change the way of doing business

4. Create new digital products

Lato is an electric bicycle company that both manufactures and provides rental services. Below we will take this business portfolio company as an example to explain how their digital transformation strategy is replanned and deployed.

• Phase 1: Change the way internal processes are managed

Lato wanted to move away from error-prone Excel spreadsheets. The company originally used spreadsheets to track bike maintenance and follow up on inventory tracking processes, but often failed to track down misplaced bikes. The company developed software to help digitize and automate the process, and the app allows Lato to smoothly track the health and location of its inventory and bikes.

It is important to ensure that the software portfolio created is always linked to the company's strategy or vision, such as developing applications that can shorten customer service processes or eliminate manual errors in invoicing processes. This is one of the key factors in achieving successful and sustainable digital transformation.

• Phase 2: Expanding digitalization outward

Lato has made great progress in bicycle tracking, reducing employee out-of-town time and optimizing vehicle return management, and the maintenance process has become more efficient. In terms of customer experience, Lato has opened the app to customers, making it easier to rent and understand the status of bicycles.

Siemens Low Code has found that many companies stagnate after reaching this stage of digital maturity. They are satisfied with this stage or don’t know what to do next. If companies can have a relatively complete digital transformation roadmap, it will be of great help to enter the next stage of transformation.

• Phase 3: Changing the way you do business

In Phase 3, we needed to take Lato’s digital story a step further. Even though Lato had already digitized and automated its production floor and the way it interacted with B2C customers, there was still a lot of room for expansion. The city where it was located wanted Lato to be the exclusive supplier of e-bikes for the municipality and purchased a batch of bikes, but lacked a digital way to manage them. From a municipal perspective, they were not fully realizing the benefits of Lato’s digital transformation.

In this case, Lato decided to change the existing operation model by providing the city with an API (application programming interface) so that it could create its own e-bike rental management application. This application perfectly integrates with the city's existing systems and can be linked with the data in the system.

• Phase 4: Creating new digital products

Another city that already had an e-bike fleet also wanted to build its own rental management app after hearing about the city’s experience with Lato. Using the API published by Lato, they also built an app that fit their technology stack and customer needs.

Lato recognizes the value of driving digital transformation, not only commercializing better ways to connect with partners, but also helping organizations drive their own digital transformation journey.

Lato has evolved from an electric bicycle manufacturer and rental company to a software company with intellectual property rights, helping B2B customers build their own bicycle rental applications. As a result, Lato has changed the way it does business with its customers and the way its offline stores operate. In addition, Lato has created a new source of revenue in a new market that it has never entered before, using a consumption-based model.

This is the stage of digital maturity that businesses should strive to achieve – creating a digital ecosystem that includes the business itself, its customers, partners, and suppliers.

How to enter the next stage of digital transformation

Digital transformation changes more than just business. Enterprises can also take new approaches to create different types of business value, providing customers, partners and other independent software vendors with opportunities to launch new business models through APIs.

This API economy could lead to big business. According to Akamai’s State of the Internet report, more than 83% of web traffic comes from some form of API, explaining the forecast that the API management market will be worth $5.1 billion by 2023. In addition to the economic benefits, APIs allow enterprises to transform at the speed they want and, when the time is right, empower partners, suppliers, customers and accelerate their digital transformation.

Customer Cases

Kermit, a healthcare consulting company, has gone digital and created software that helps hospitals control spending on medical devices such as pacemakers, artificial joints, and other physician preferred items (PPIs). The billing process for these items is tightly controlled by the vendors, and the lack of transparency in the process can have a huge negative impact on hospital spending.

In just nine months, two of Kermit’s sales representatives and a business lead, with the assistance of a developer, used the Siemens low-code platform to create a solution that the hospital could use to curb PPI spending, helping the hospital save millions of dollars.

The next step in digital transformation

No matter what stage of digital transformation an enterprise is in, it should establish a framework for the continuous creation of applications that meet the vision. This will help transform and optimize within the enterprise and take the next step in the digital transformation process - expanding outward.