Problematisation - The dominant linear resource consumption model has prompted growing concerns related to unsustainable resource overuse and escalating price levels, fuelling the emergence of the circular economy concept as a strategic response. Transitioning from a linear economy towards a circular economy is far from easy. Therefore, researchers agree that digital technologies are vital to such a transition. However, current conceptual tools to assess the maturity of digital technologies do not consider all aspects of the circular economy.

Purpose – The research aims to suggest and demonstrate a new maturity assessment tool called “circular economy readiness level” (CERL) assessment, which will require constructing a new dimension to consider circular economy aspects. The CERL assessment is based on Vik et al.’s (2021) “balanced readiness level assessment” (BRLa).

Research Design/Method – A research through design method was chosen to suggest and demonstrate how the CERL assessment tool caters to digital technologies in a circular economy transition. By following the 6-step process by Peffers et al. (2007), called the design science research (DSR) method, the CERL assessment tool was developed by constructing the new “ecosystem readiness level” (ERL) dimension. The suggested tool was demonstrated through empirical data from semi-structured interviews using a manufacturing and machining solutions company. Furthermore, an evaluation occurred by analysing the empirical data of three digital technology cases.

Findings – Digital technologies are a key aspect of enabling circular economy transitions. Taking a digital technology’s ecosystem into consideration when assessing maturity generates a more comprehensive assessment of digital technology within a circular economy context. Recognising how the ecosystem’s elements and actors are structured, what role the organisation has, how value is generated, and the need for collaboration were found to be important. Using this new dimension in the CERL assessment generated valuable insights into the organisation’s digital technologies.

Implications – When assessing the readiness of digital technologies, the maturity of the technology itself is not the only barrier; rather, the supporting circumstances are not ready enough to utilise the full potential of each technology. By suggesting a maturity assessment tool, the research can provide an understanding of how digital technology aspects can be leveraged to support the circular economy transition, identifying both opportunities and obstacles.