Digital transformation is an incredibly challenging process, so it is important to measure digital transformation progress as you go- and it’s no wonder so many organisations put their efforts into large scale digital initiatives without seeing any real success.
According to McKinsey fewer than 11% of certain types of organisations achieve their digital transformation objectives.
Most businesses see digital transformation (DX) simply as ‘technology replacing manual processes’. DX initiatives are accounted for as ‘operational efficiencies’.
This narrow view fails to take in other key metrics, metrics that could be invaluable in helping organisations see and fix obstacles that may prevent them from achieving successful digital transformation.
In this post, we’ll look at valuable metrics to measure digital transformation that provide an accurate picture of whether you’re currently succeeding at digital transformation, or not.
1. Scope of digital transformation
Particular metrics can help you measure whether digital transformation is helping you achieve your objectives in reaching a wider audience.
Measure, for example:
- Your number of unique visitors.
- Your number of registered users.
- The growth in your subscription uptake e.g., MOM (month on month) growth in registrations.
- Your organic user acquisition.
2. Active users
Successful digital transformation requires that users are using the technology you’re providing. The following metrics can help you identify usage:
- Daily active users (DAU).
- The number of active users/monthly active users.
- The ratio of new/repeat customers.
- Conversion rates.
- Abandonment rates.
3. Engagement amongst users
Your new technology should be engaging enough to warrant regular usage. If users aren’t engaging fully with your technology, they’re not finding it useful enough to switch to it on a regular basis. Only when you understand usage patterns can you make improvements.
Metrics around usage include:
- Net Promoter Score (NPS).
- Customer Satisfaction Index.
- Posts contributed.
- Photos/videos uploaded or shared.
- Number of likes and shares.
- Traffic sources.
- Bounce and exit rates.
4. Reliability and availability
Switching operational workflows to the cloud can lead, in some instances, to breakdowns or cause performance issues. While technology vendors promise certain SLA commitments, real-time events can prevent this from happening. So, it’s essential to keep an eye on reliability.
To help you do this, measure:
- Uptime (the percentage that a solution remains operational for its intended purpose).
- ‘Mean Time to Failure’.
- ‘Mean Time to Resolve’.
- ‘Mean Time Before Failure’.
5. Risk measurement
To assure success in digital transformation it’s essential to engage in risk-reduction around your new technologies. As assets become digital the risks surrounding cybersecurity and data privacy, for example, must be evaluated.
The following metrics can help you to assess the risks associated with digital tech infrastructure, so look at:
- The volume of data being transferred.
- The frequency of access at various levels of privilege.
- The number of solutions with known vulnerabilities.
6. Customer experience
One of the main metrics to measure digital transformation is a customer’s perception of your technology. End-user satisfaction will ultimately determine how successful your technology investments are, translating into your desired financial and organisational improvements.
Some metrics to consider using to evaluate customer satisfaction include:
- Customer Effort Score (CES).
- Customer Satisfaction (CSAT).
- Sentiment analytics.
- Customer Loyalty Index (CLI).
7. Cost of digital initiatives
Successful digital transformation can only be achieved with sufficient investment in digital initiatives. Companies that fail to direct enough resources towards the adoption of new digital tools are unlikely to get high returns. However, there needs to be a balance between investment and over-investment in digital. The law of diminishing returns starts to kick in once a balance point is reached.
Gartner calls this point ‘techQuilibrium’, where an enterprise has the right mix of traditional and digital capabilities and assets.
Every company should prioritise digital transformation and find ways to gain insightful feedback to make the right improvements to drive the process forward. Identifying the right metrics to measure digital transformation is crucial.
And once you’ve identified the right metrics to use, you need to find the right KPIs to aim for in your digital growth strategy.
Define KPIs that:
- Align with your organisational goals.
- Focus only on the metrics that are most relevant to your business.
- Enable you to accurately benchmark your progress against past performance (or use industry-accepted benchmarks). The ADE Index can help you measure how your company is stacking up on these efforts. You can take the test here.
- Are quantifiable, accurate and insightful.
- Get stakeholder buy-in to ensure your metrics results are acceptable to everyone in the company.
To help you identify the right metrics to measure digital transformation, as well as pinpointing the right KPIs to track, specialist advice from an industry expert could be invaluable.