Although Digital Transformation offers a lot of advantages, many businesses and their leaders struggle to assess its impact. “90% of CEOs believe the digital economy will impact their industry, but less than 15% are executing on a digital strategy,” says MIT Sloan and Capgemini.
And we all know that measuring is crucial for staying on track and achieving desired outcomes.
According to SAP, “less than 1% of data in businesses is analyzed and turned into benefits.” The real issue is that managers and experts don’t know what to focus on, what to aim for, and how to measure their progress.
There’s no “one-size-fits-all approach” to measure how well a company is doing with digital transformation. The metrics that matter most will depend on what the company is trying to achieve. Nevertheless, I’ve compiled a list of common KPIs to consider, regarding the Digital Transformation measurement.
- Digital Transformation makes the customer experience seamless and frictionless, driving satisfaction by harmonizing processes and tailoring interactions to individual needs. There are several tools to measure Customer Satisfaction such as surveys, focus groups, or social media engagement analysis.
- Digital Transformation drives Operational Efficiency by automating manual processes, streamlining workflows, and enhancing resource allocation. Organizations can measure their progress through metrics like cycle time improvement, error rate reduction, and throughput optimization.
- Digital Transformation can help organizations become more innovative by providing them with new tools and technologies to experiment with. Organizations can quantify their Innovation efforts by monitoring various metrics, including the launch of new products and services, the acquisition of patents, and the number of awards won.
- Digital Transformation can stimulate Revenue Growth by expanding market reach, expanding customer base, and introducing innovative solutions. Organizations can assess the effectiveness of their digital transformation efforts by monitoring metrics such as revenue growth rates, customer acquisition cost ratios, and customer lifetime value improvements.
Clearly, defining goals is indispensable, as you can readily recognize. Once you’ve defined what you aim to achieve, you can select the metrics that will effectively measure your progress. To effectively track your progress, it’s essential to establish a benchmark, which serves as a snapshot of your current performance in the areas you’re tracking. This baseline will provide a valuable reference point for future comparisons.
It’s important to emphasize that measuring once and then ignoring the results is ineffective. You need to regularly collect data on your chosen metrics. This will help you identify trends and patterns over time, which can give you valuable insights into the effectiveness of your digital transformation efforts.
Also, don´t forget to analyze the data you’ve collected to uncover patterns, trends, and areas for improvement. This data-driven analysis will guide informed decisions about your digital transformation strategy.
Based on your data analysis, you may need to make adjustments to your digital transformation strategy. Embracing this flexibility shows a willingness to learn from data and adapt your approach as needed.
It’s your turn. Sail your way! 🙂 Challenge the odds of less than 15%. Because “when digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.” – George Westerman, from MIT Sloan Initiative on the Digital Economy.