Nearly three-quarters of businesses say digital transformation is a top priority. Yet, according to Bain & Company, 88% of digital transformation efforts fail to meet their objectives.
Setting an agenda for your digital transformation project is challenging and next steps for clear tracking and monitoring of your digital investments often gets overlooked. When evaluating digital transformation initiatives, you need consistent measures against your key performance indicators (KPIs) to ensure your digital transformation strategies meet your goals.
Key Takeaways:
- Understanding how to measure digital transformation is essential for success.
- You must set clear objectives and ensure that your digital initiatives are aligned with your business goals.
- Tracking the right KPIs can ensure you stay on track and optimize your digital transformation.
- Continuous monitoring helps track progress and refine strategies to reach your overall goals.
What Is Digital Transformation?
Digital transformation is about more than just digitizing assets. Digital transformations are about rethinking your business and changing the way you operate and provide value. It’s a cultural shift that leverages digital tools and digital technologies to streamline your business and improve efficiency.
This means your digital initiatives and digital transformation strategies must align with your overall business goals. And, you need to track digital transformation success metrics to ensure you stay on track to meet these goals.
Eight Digital Transformation KPIs to Track Your Enterprise Progress in 2024
So, how do we measure digital transformation? Here are eight digital transformation KPIs that can help you on your journey.
1. Customer-Focused KPIs
At the core of digital transformation is customer satisfaction. So, your digital transformation metrics need to track KPIs such as:
- Customer satisfaction scores (CSAT)
- Net promoter scores (NPS)
- Customer engagement
- Customer retention
Providing a robust customer experience is essential for success, so you need to ensure that your digital initiatives are delivering what your customers need.
2. Employee KPIs
A key part of digital transformation is empowering employees with new tools and systems. Tracking employee productivity, digital tool adoption rates, and engagement scores helps assess how well your workforce is adapting to these changes. High engagement and adoption rates typically indicate a smoother and more effective transformation.
3. Learning and Development KPIs
Digital transformations evolve over time. Employees have to learn new systems and tools. Tracking KPIs that measure adoption rates, employee learning, and development is crucial to ensure your workforce is embracing a new way of doing business.
Metrics for digital transformation in this area include:
- Training completion rates
- Time to competency
- Digital skills assessments
Initial training is key to adoption and competency. Follow-ups are crucial to cement lessons and ensure optimal use. This ensures your employees are equipped to thrive with your digital initiatives.
4. Financial KPIs for Measuring ROI
Financial metrics focus on the return on investment (ROI) for your transformation initiatives. KPIs include:
- Total cost of ownership (TCO)
- Revenue growth from digital initiatives
- Return on investment (ROI)
One survey of business leaders reported that ROI for digital transformation is also measured in terms of employee productivity.
5. Technology and Innovation Metrics
A manual to digital transformation relies on both technology and innovation. And, if your systems aren’t living up to their billing, you may be falling short. You need to track KPIs such as system uptime, response times, and innovation rates to track the effectiveness of your technology investments.
Tracking innovation rates may be the most challenging here. But keeping an eye on product development and advances in time-to-market, for example, can help.
6. Project Management KPIs
Project management KPIs help ensure your digital transformation stays on schedule and delivers within the scope you intended. KPIS here include:
- Milestone achievement
- Completion rates
- Budget adherence
- Resource utilization
These KPIs help you assess your engineering and integration process to ensure you are consistently meeting your goals.
7. Organizational Change KPIs
Successful digital transformation typically requires significant organizational change and a focus on change management strategies. Some of the KPIs for measuring the success of organizational change include:
- Employee sentiment
- Change adopt rates
- Change management KPIs
It’s a good idea to assess digital readiness before you begin your transformation process. Many change initiatives fail because they did not have the right foundation built. For example, failing to understand the potential of AI and its challenges in implementation — both from a process and people perspective — can hinder transformation efforts.
8. Business Process KPIs
Streamlining and increasing throughput are key goals in most business transformations. You need to track key metrics that focus on process efficiency, such as cycle times, automation rates, and error reductions. This is especially critical in your supply chain management and production control.
Such metrics demonstrate the impact of your digital transformation and operational efficiency improvements.
Start Tracking the Right Digital Transformation Metrics
Tracking the right digital transformation metrics is critical to optimize your digital initiatives. And, it’s not a one-and-done exercise. Continuous measurement is crucial to meet your deadlines, adoption, and overall goals. It takes active management and focus to effect significant change.
Tracking the right metrics can ensure you stay on track and optimize your transformative efforts.
Surgere is a leader in supply chain management. We create and manage innovative IoT supply chain solutions, providing real-time intelligence with 99.9% data accuracy. We also produce actionable insights to streamline and improve your operations.
Begin tracking supply chain KPIs to ensure the success of your digital transformation and see how Surgere can help enhance your supply chain. Contact Surgere today.
Frequently Asked Questions — FAQs
What is KPI in digital transformation?
Key performance indicators (KPIs) measure the digital transformation process to demonstrate how you perform against your objectives.
What are the 4 main areas of digital transformation?
The four main areas of digital transformation are:
- Business model transformation
- Process transformation
- Domain transformation
- Cultural and organizational transformation
Organizations must focus on all four areas for digital transformation success.
What are the 4 P’s of digital transformation?
The 4 Ps of digital transformation refers to:
- Process
- People
- Platforms
- Performance
