If your organization is embarking on a digital transformation initative, it’s essential to set clear and measurable business goals. You should also think about how you will measure your progress and determine if the project has been successful.
Because a digital transformation project involves people, technology, and business process, it can be difficult to determine the results. “Unless you measure the right things, you just don’t know how well you did,” said consultant Gary Audin, Delphi, Inc. at an Enterprise Connect 2019 session, “Digital Transformation Metrics.”
“If you bring the silos together in one initiative, you will also need to measure them together,” Audin said. “But you always need to stay focused on the business outcome.”
Many digital transformation projects are aimed at improving customer relationships. A good starting point is to look at your current key performance indicators (KPIs) and see if they can be used to measure the impact. For instance, an initiative might aim to increase sales, repeat business, loyalty, or customer lifetime value (CLV).
However, organizational silos can create challenges for measuring the impact of a new project. For instance, the website and contact center teams might be using different metrics or have different customer perspectives. Contact center agents might strive to keep calls as short as possible to handle customers as efficiently as possible, while the website team may want customers and prospects to stay on the site as long as possible. “If you bring the silos together in one initiative, you will also need to measure them together,” Audin said. “But you always need to stay focused on the business outcome.”
When planning this type of project, you should also look at the nature of your business, such as seasonality of sales, or other industry variations. A retailer probably shouldn’t make major changes to the website during the peak holiday season, while an agriculture company might be busiest during the spring planting or fall harvest seasons, Audin said.
Other digital transformation projects consider internal business processes and workforce productivity. “Think about the best measure for operational improvement,” Audin said. A manufacturer, wholesaler or retailer, for instance, might look for a reduction in inventory or an improvement in delivery times. “You want to ask yourself, which business units now operate most efficiently, and can those practices be carried over to other units with your project,” Audin said.
Here are several other best practices for tracking the success of a digital transformation project:
• Get support from senior leadership by showing how the initiative will benefit the organization.
• Create a baseline at the start of the project to measure progress.
• Determine the appropriate measures for each business unit or department involved in the project.
• Correlate those “silo” measurements to get an overall perspective.
• Measure frequently during the project so you can get a real-time look at trends and make any needed adjustments.
• Translate technical metrics so senior management or non-IT business units can understand them.
• Don’t put too much attention on social media results. “Remember that ‘likes’ on Facebook don’t generate profits,” Audin said. “High activity doesn’t necessarily correlate with revenue production.”
• In calculating the return on investment (ROI), try to relate the outcomes to dollars. However, goals like increasing market share can be hard to correlate with specific dollar amounts.
Finally, Audin says it’s best to keep a project simple, rather than trying to do several things at the same time. As he said, “Start with one project, measure the results, talk about what you learned and then go on to do another one.”