The ROI of DMI: How Digital Maturity Impacts Your Budget and Bottom Line
2024 has been a year of unpredictability, and so companies need to stay ahead of the curve to remain competitive. One of the best ways to ensure operational efficiency and growth is by improving your Digital Maturity Index (DMI) score.
DMI is a measurement of an organization’s digital transformation, assessing its technology, processes, people, and culture. It’s like a digital health check, providing a snapshot of where a company stands in its use of technology and how well it is positioned to leverage that technology for growth and success. A high DMI score indicates that a company is well-equipped to take full advantage of its technology, leading to enhanced performance, security, and innovation. By understanding their DMI, business leaders can make informed, proactive decisions that align with their overall strategic goals, ensuring they stay competitive and capable of meeting future challenges.
As Eira Rios, our procurement manager, explains,
“Just like a credit score, you are able to see an overview of where you stand in terms of hardware. It allows the person in charge of hardware to have a jumping-off point. It shows your weak points. When you know this, you are able to be proactive and not reactive – you can plan ahead and not experience interruption.”
But what exactly does this mean for your business? How does it affect your performance, and why should you care about investing in digital transformation?
Understanding Digital Maturity and Its Impact on Performance
When it comes to improving operational performance, there are a few critical elements that businesses need to focus on. These include the age of devices, the specs of the devices (such as memory and storage), and the warranty associated with the hardware.
1. Warranty
A solid warranty is essential to avoid interruptions to daily operations. If a device malfunctions, having a warranty means you won’t incur the upfront costs of purchasing a new device. Any issues will be covered, minimizing workflow disruptions.
2. Device Age
The standard computers purchased seven years ago simply don’t meet today’s performance standards. Outdated hardware can lead to lagging system performance and ultimately affect productivity.
3. Storage
Every software program has specific requirements for memory space (such as Microsoft programs requiring a minimum amount of short-term memory). The size of a device’s SSD (Solid State Drive) is critical, especially if your business isn’t using the cloud. Files saved locally will consume space quickly, impacting performance. Cloud systems also require a certain amount of storage to function effectively.
The Value of a Digital Maturity Index (DMI) Score
Think of your Digital Maturity Index (DMI) score like a credit score—it provides a snapshot of where your business stands in terms of hardware and technology. This allows IT leaders to proactively address weaknesses, rather than reacting to problems when they arise. With a clear understanding of your organization’s DMI score, you’re in a better position to plan ahead and avoid unexpected disruptions.
For example, a DMI score of 500 might indicate that your company is using outdated equipment, has gaps in employee training, or lacks sufficient cybersecurity measures. On the other hand, a score of 850 suggests that your organization has invested in newer technologies, has robust processes in place, and is leveraging its technology effectively. Companies with higher DMI scores are generally able to operate more efficiently and securely, which ultimately translates to better budgeting and forecasting for technology expenses.
A DMI score of 900+ typically reflects a fully optimized IT environment, where hardware, software, and processes work in harmony, allowing for smoother operations and a more predictable IT budget.
By focusing on improving your DMI, you can create a more well-rounded technology environment that enhances overall performance and security. This holistic approach also helps ensure compliance, making it easier for your business to meet industry regulations.
Real-World Financial Benefits of a Higher DMI Score
A nonprofit organization we worked with offers a clear example of how improving DMI leads to better budgeting and operational outcomes. As a nonprofit focused on growth, they had previously struggled with unpredictable technology spending, which led to inefficiencies and missed deadlines. In 2021, they spent $106,000 on technology. By 2024, after embracing a more strategic approach to their hardware lifecycle with the help of IT consulting, their technology spend increased to $160,000. However, despite this increase in absolute spend, the nonprofit managed to maintain a stable percentage of their budget dedicated to technology.
Eira Rios notes, “Clients who embraced higher levels of DMI experienced easier times budgeting. [The nonprofit] had a 3-year lifecycle which improves their DMI score. It eliminates spending outside the prepared/approved budgets that they have to work with. It allows for predictability.”
In 2021, their hardware purchases were reactive, opting for the cheapest options as needed. This approach resulted in poor performance and unpredictable costs. After working with IT consultants, they adopted a three-year hardware lifecycle strategy and embraced the improvements recommended for their DMI score. This shift to a more proactive, planned approach not only provided them with more reliable equipment but also allowed them to eliminate spending outside of the approved budget, making their technology costs more predictable.
Remarkably, despite the increase in hardware spend, their technology spend as a percentage of the total budget barely changed. The increase in spend was directly attributed to the strategic IT consulting they received, as well as the decision to embrace a more mature digital infrastructure—both of which helped them achieve growth without overburdening their finances.
The benefits of this change were immediately visible. By switching to a lifecycle approach, the organization eliminated unexpected technology costs and saw quicker turnaround times, improving overall efficiency. Their teams were able to focus on their mission, rather than troubleshooting IT issues.
The Cost of Ignoring Digital Transformation
The absence of a strategic technology plan can also lead to revenue loss—especially when cybersecurity is involved. Businesses using outdated devices are more vulnerable to cyberattacks. In fact, the cost of a ransomware attack is often unpredictable, but the cost of replacing a device is far more manageable in comparison. Companies that fail to update their technology risk not only operational downtime but also the potential financial devastation that comes with a security breach.
Eira Rios explains,
“Old devices are less secure and more susceptible to cybersecurity attacks. The cost of ransomware is unpredictable, and the cost of replacing a device is a fraction of that.”
The ROI of Digital Maturity: Looking Beyond the Initial Investment
From a procurement perspective, the ROI of investing in digital transformation extends far beyond the initial costs of hardware upgrades. When your hardware lifecycle is well-managed, you can focus on growing your business without the distraction of constant IT issues.
The real benefit lies in the growth potential that comes with a properly managed tech stack. With the right hardware, your business can scale effectively, increasing efficiency and productivity. And it all begins with improving your DMI score. By investing strategically in technology today, you’re setting your business up for exponential growth in the future.
Eira Rios, Procurement Manager, sums it up:
“When your hardware lifecycle is well-managed, you can focus on growing your business. The biggest factor is that if they allow their technology to grow properly, their business can grow exponentially – and it all starts with DMI score.”
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