Capability Maturity Models for Digital Transformation and Sustainable Competitiveness in Small and Medium-sized Enterprises

Digital tools and technologies enable data-driven decision-making; facilitate supply chain visibility and traceability; and empower employees to enhance their productivity, collaborate more effectively, and engage in continuous skill development. However, businesses, especially small and medium-sized enterprises (SMEs), face significant challenges in implementing digital transformation initiatives, including integration difficulties, insufficient technical skills, data governance and cybersecurity, the pace of technological advancement, and employee resistance. Investing in new technologies without addressing these challenges or building capabilities impedes success and results in underutilization and ineffective deployment. Successful digital transformation requires comprehensive organizational change that impacts strategy, processes, capabilities, and culture. Capability maturity models can help organizations build the capabilities needed for successful digital transformation, and this P-Insights publication outlines how. It offers a comparative analysis of leading global maturity models used to guide digital transformation and shares insights from the implementation of a capability maturity assessment tool, DigiCap, in manufacturing SMEs in the United Kingdom. It also introduces a new hybrid maturity model that addresses the limitations of existing tools and offers a context-sensitive, action-oriented framework tailored to the needs of SMEs undergoing digital transformation.