My Friend is preparing for an Interview in one of the finest digital Company, Some of the questions they inquire related to how do you measure the success of Digital Initiatives?? a Retrospect on that query.
Digital transformation — the adoption of technology to radically improve performance or ability of enterprises. It helps maximize productivity and enhance the customer experience.
Digital transformation should produce something unique.
As Forester suggests, genuine transformation is a journey, not a destination.
Digital transformation include Transforming Operations, Transforming the Customer Experience, Transforming Processes, Transforming Business Models
According to Forbes, 70% of all digital transformation initiatives fail.
Recent reports by Gartner back this up: they explain that approximately 50% of CEOs have no metric for digital business transformation.
Digital transformation involves using digital technologies to transform a process to become more efficient or effective.
Digital transformation can comprise many diverse technologies, but the hottest topics right now are cloud computing, the Internet of Things, big data, Blockcahin, Computing power, Machine Learning and artificial intelligence.
Digital transformations require cultural and behavioral modifications such as a measured risk-taking, increased collaboration, and customer-centricity.
A true digital transformation project involves fundamentally rethinking business models and processes.
The business value is the standard value measure used in business valuation.
PMBOK® defines business value as the entire value of the business; the total sum of all tangible and intangible elements.
Business value consists of :
- Increase revenue
- Decrease cost
- Improve productivity
- Differentiate the company
- Improve client satisfaction
How would we characterize the progress achieved in becoming a digital business?
Most marketing KPIs are “vanity metrics,” said Jen Grant, CMO of business intelligence software maker, in an interview with CMO.com. They “feel good but don’t really give you a good view of whether your business is healthy or in trouble.”
According to Gartner, the best metrics:
- Have a clearly defined and defensible causal relationship to a business outcome
- Work as a leading, not lagging, indicator
- Address a specific, defined audience
- Can be understood by a non-IT audience
- Drive action when they change from green to yellow to red.
Business leaders must rely on fresh KPIs for effective IT measurement.
Traditional IT measurement, with its long-term focus on efficiency metrics for the managing infrastructure, applications, and components, is no longer acceptable.
Is there a clear cause and effect relationship between the change and the resulting gain that can be quantified and measured on the income statement ?
- Key elements of digital transformation include focusing on the digital experiences of both customers and employees.
- The number of licenses department purchased to the number of employees who are actually utilizing the software.
- How department digital tools are being used will give you a clearer picture of how effectively your employees have adopted the tools and actually achieve meaningful benefits.
- Change in customer behavior over time across channels
- Number of customer touch points addressed to improve customer experience positively
- Reduction in time to market new products to customers
- Number of innovative ideas reach concept to implementation
- Percentage of revenue from new products/services introduced
- Percentage of the profit from new ideas implemented
- New on boarding to the platform , new user are using this platform, they are growing or stagnant
- How new Digital platform is enabling customer/user KPI
- Survey user satisfaction
- Responsiveness of the user
- Data Volume(TB), Variety(Types of data source), velocity( Data generated/analyzed per time period) , What is the cost savings due to this easy data usages?
Leading indicators measure change. They deal with immediate progress and show the likelihood that you will achieve your goals.
- Unique visitors
- Daily active users
- Time spent on the website
- The average revenue per user
Lagging indicators measure results. This means they are the direct result or output of your organization’s activity.
- Brand recognition
- ROI
- Customer acquisition costs
- Customer renewal rate
- Churn rate
Success requires consistent monitoring and course correction based on what we find out.
We are Transformation Change agents, we need to guide the team to come out with better KPI to measure the transformation initiatives.
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