Business Value calculation for Digital Transformation Initiatives

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.

Building your next Curve for Growth?

Bejan developed the principle 15 years ago and has been using it to describe and predict an extensive variety of man-made and natural phenomena. The current analysis views this ubiquitous S-curve (also known as the sigmoid function) as a natural design of flow systems.

A sigmoid function is a mathematical function having a characteristic “S”-shaped curve or sigmoid curve. 

When studying at the personal growth life cycle, we can identify among 4 distinctive stages: Ferment, Takeoff, Maturity, Discontinuity.

This could be the same as the product or technology development life cycle.

Do you notice we can map this with our career growth and progress?

Where are you in the S curve?

How many S Curve so far have you introduced to remain relevant in the industry and how rapid?

Are you still providing value by coming out with a disrupting offering in the growth path?

Positioning a unique offering into the industry/new role assists professionals to figure out what is the potential of it and also determine a particular innovation strategy that will fit best for it.

The phases of the S curve: 

Era Of Ferment – This phase is at the beginning of the S-Curve pattern of innovation or growth life-cycle. It is when the individual is absolutely new into the unique offering or role. As a result, a dominant style in the job hasn’t been established yet. Usually, at this stage, most of the resources are concentrated on research and development(Discovery phase).

Takeoff – In this phase, due to the ability to overcome a major technical obstacle or the ability to satisfy a demand of the organization, the individual offering has been adopted by the early majority and managed to cross the chasm and an outstanding offering has been established already. Hence, the offering will be characterized by rapid growth in service, and the individual career/contribution will progress swiftly towards full organizational acceptance.

Maturity – Here, individual growth is adopted almost completely by the organization and is usually approaching a value limit. Due to the strong competition among the other team members in the organization which is evidently defined at this stage, most of the talents at this point are spent on improving the value offering processes and making them cheaper. Therefore, oftentimes the individual offering at this stage becomes completely standardized and the innovations at this stage are considered incremental.

Discontinuity – At this phase the innovation occurs, as a new S-Curve pattern can pick up. Since the previous individual offering/value generation reaches an era of maturity, there is an opportunity for a unique offering to appeal to the innovator’s segment in the industry and will create a unique offering/role/value generation life cycle which is generally treated as the Disruption.

My S Curves when I reflect. Wondering what will be my next S curve?

All of us are pushing additional S-Curves as the growth progresses, what is the span of the S curve?

Are you making your next S curve for disruption?

Are you introducing multiple S curve?

How good are you on your growth life cycle management?

Are we in flow state in our career? Or Relax zone? or Anxious?

Why will Lion eat Grass? Corporate Climate Change!

When a lion cannot find the flesh to feed on, it has no choice but to eat the grass.

African Proverb

Have you seen this story in real life? 

A tale to report.

Once upon a time, in Software service company the rule was to everyone should be a billable resource. There is no bench concept. In a good time, every team member was in demand and they were capable to clock 100% billing.

As an when competition increases there are a couple of more company started entering into the existence.

There was an Agile consultancy farm, they used to support Agile consultancy and training. In good old days, they managed to get 100% engagement from the client. The agile transformation was in the boom. Agile was a silver bullet!

As an Agile implementation got wildfire, there are many agile farms flourished and started providing offering service. Agile cup, agile mugs, agile dresses, etc.

Supply was more than demand, Agile coaches are not able to engage themselves. You need to wear a coat written Agile! that’s it to claim Agile coach!

When the economy becoming tightening...

Business is asking what value Coaches will bring? Sr Agile coach what Value they will bring vs entry-level coaches, there are so many junior coaches, why Sr. Coaches? at the Half price, the team was getting coaching services! why Sr Coaches? somewhere team is asking why coaches, teams are mature and can manage. 

Now, Agile coaches to remain relevant and get billing, Many Sr agile coaches are doing Scrum Master role, Few Agile coaches are playing the role of Project managers, Many agile coaches are playing the role of PMO. Few Agile coaches joined the AI machine learning course. Perhaps this will secure the future!

Whatever require to get billing, Lion has to eat grass.

Nothing awful, when the situation is rough, we have to work out everything which keeps the engine running and bring food to the table...

Have you heard such a tale!! It is just a fictitious narrative, such a condition will never appear ;-)