Digital Transformation Success Factors: How to measure key KPIs

Digitization has transformed every industry, be it education, financial services, banking, insurance, retail, or manufacturing. Digital transformation is an ever-evolving process. Huge investments are made on digital transformation processes and solutions. But how does one measure the success of the implemented digital processes? How do you gauge the efficiency of digital transformation to improve success parameters?

According to McKinsey’s Digital Quotient analysis, less than 15% of the companies can quantify the impact of their digital initiatives. Among all other ways, you can break the large plans into small actionable plans with specific Key Performance Indicators (KPIs) for a particular time period. This makes KPIs extremely crucial. To create a digital KPI, Gartner recommends IT organizations to consider these five key questions:

What are we measuring (for example, the percentage of customer interactions on digital medium)?
Where do we stand today?
What are the goals we want to achieve?
What is our business outcome we desire? (For example, 60% better customer outcomes and 30% lower cost)?
What is our balance point? (The reasons why an organization shouldn't go overboard with digitization)

Along with the cost & revenue metrics, new metrics like the following can be considered:

1. Digital Competencies

Digital marketing expenditure
Brand’s market value
Company’s reach in the market
Revenue through digital channels

2.Customer Focus & Engagement

The rate at which a new customer is acquired
Number of touchpoints for customers
Rate of customer engagement digitally

3.Return on Innovation

Revenue from the introduction of new products/services
Profits earned from ideas put to practice
Number of new products launches & business models

4.Predictive Analytics

Ability to foresee market changes & customer demands
Process huge amount of data using technology

5.Workforce Productivity

Analyze the productivity of employees and the decision-making process for better results

All the KPIs will help you to determine digital transformation success. The entire ballgame of digital transformation needs expertise and proficiency possessed by digital transformation consulting firms. One of the pioneers being Sonata Software can help you with determining your organization’s digital transformation strategy and implement it to drive growth keeping in mind the KPIs.

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