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March 31, 2023 - by Synoptek
So much has been said (and done) about digital transformation in the past couple of years, and rightly so. The business benefits of digital transformation are just too many to overlook. From enhancing collaboration to improving business process efficiency, increasing business agility to driving better revenue. Organizations that embark on the journey experience several transformative benefits. What they fail at is quantifying these benefits.
By 2026, global digital transformation spending is expected to reach $3.4 trillion. Equipping businesses with the ability to improve performance, transform existing processes, or create new ones, digital transformation goes a long way in cutting costs, enhancing operational efficiency, and crafting better customer experiences.
Despite the many business benefits of digital transformation, only a small percentage of digital initiatives see the light of day. Many fail to deliver business value on time and within budget. And it’s not just business performance or user/customer experience that gets impacted. When IT teams struggle to demonstrate a compelling ROI on transformation initiatives, they are unable to secure business support or funding for new projects.
Quantifying your digital transformation initiatives is vital to understanding if your investment is worth pursuing. Comparing the potential return of different investments helps in making informed decisions about allocating funds and resources to the right programs. Simultaneously, metrics help measure how well your newly-implemented digital systems are faring while providing detailed insight into the challenges your business can overcome as a result.
Digital transformation metrics offer a great way to track progress toward goals. Identifying KPIs that best align with strategic goals can help you understand the overall health of your transformation efforts.
That said, here are 5 digital transformation metrics you must focus on:
When you get a cloud-based ERP on board or enable the automation of mundane, day-to-day tasks, it can greatly impact user satisfaction levels. Understanding how satisfied or happy your workforce is with the digital steps you are taking is a great way to quantify the ROI of your transformation initiatives. Any improvement in satisfaction or productivity levels is a clear indicator of the success of your digital transformation project.
The digital transformation steps you take don’t just enhance user satisfaction but also customer experience. Are your customers happier with the products/services you offer? Are they sticking with your brand for a longer time? Are they writing (and speaking) good things about your business? Capturing customer satisfaction scores along your journey can help you better understand how your transformation efforts are faring or what steps you need to take to elevate the experience.
If, by getting rid of old systems or investing in new automation and data analytics systems, you are reporting higher net revenue growth, you can term it as a positive digital transformation business impact. Comparing how much you’ve spent on new technology, processes, training, and other related expenses vs. how the digital platform has improved your business bottom line can paint a clear picture of your potential digital transformation ROI.
Archaic systems or siloed processes make business decision-making extremely sluggish and prone to error. If modernizing your legacy system or integrating your applications is accelerating your decision-making speed, it means your digital efforts are paying off. When quantifying your digital transformation initiatives, determining how quickly you can respond to market trends, business changes, or customer requirements is a great way of calculating the ROI of your project.
Another way of measuring the benefits of your digital transformation project is by evaluating your application uptime. Equipping your workforce with a robust set of digital systems ties in with better productivity and efficiency. Do your newly deployed ERP and CRM systems drive better business results? Are you experiencing high levels of availability post-replacing legacy technologies? Can your users perform their jobs better via highly functional and scalable systems?
If you want your digital transformation efforts to stay the course, you need to identify and link your KPIs directly to your goals. Capturing (and measuring) digital transformation metrics helps you track your digital journey and prevent you from going astray. Metrics that are linked to core business objectives can enable your workforce to stay focused and make better, data-based decisions. Clear goals also prevent you from wasting time, energy, money, and resources on futile exercises.
But given how complex and time-consuming a digital transformation project can get, expecting the already-strained in-house IT team to drive results is unreasonable. If you want to maximize ROI from your digital transformation efforts, you need to engage with a partner who can offer expert digital transformation services and help:
Despite the looming economic slowdown, organizations, big and small, continue to embrace emerging digital trends for various reasons. If you are considering getting on board the digital train or are looking to further exploit the benefits of digital transformation, you must take the time (and effort) to calculate the ROI.
Capturing key digital transformation ROI metrics can help you better understand the results of your efforts while allowing you to change course as needed for better outcomes.
Reach out to a partner today and make the most of digital transformation services.
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