Five Metrics To Measure The Success Of Digital Transformation

Introduction

With the rise in the digitization of businesses, the leaders are likely to come up with many new digital initiatives to be launched under the brand's banner. These include building new websites interactive platforms, launching new products online, and new customer policies. Hence, it has become crucial to know whether the initiatives taken by the CEOs and team leaders prove capable of garnering profitable results.

While the continuous streaks of fresh initiatives are necessary for a firm to establish its roots in digital media, it is vital to measure the results of these ideas that the firm is receiving. Measuring the impacts of digital transition helps the firms understand their initiatives' efficacy. It further helps them improve the firm's overall performance and take corrective actions.

To sum up, here are the five metrics to measure the success of digital transition!

5 Metrics to Measure the Success of Digital Transformation

Return on Digital Investment 

The investment in individual digital projects should always be checked for profitable results. The digital leaders should check that the value of money spent on these initiatives must garner the necessary growth support for them. The initiatives must collectively support the firm's growth goals. The CEOs must ensure that the returns from their digital projects prove profitable for the firm.

Maximizing the returns is the key to transforming one business at a time. Transforming multiple initiatives may lead to excessive investment with a lack of monitoring of their performance at any given time. Therefore, invest in projects, customer policies, employee journeys, and customer retaining processes one at a time.

Amount of Annual Technology Budget spent on Bold Digital Initiatives.

Firms need to be innovative while allocating their technological budget. Firms that spend a small budget on their best and most innovative digital ideas tend to receive less return and vice-versa.

Firms should always spend most of their technology budget on best-selling digital initiatives to deliver digitally-backed value. To add to this, firms should take the help of modern business technology like microservices, best-of-breed tools, custom application development, etc., to create new products faster and provide services with the maximum return value.

Time Spent on Building Digital Applications

The other important metric to measure the success of digital transition is to track the time spent on building a digital application by the firm and monitor its deliverability according to its deadline. The CEOs need to track how much time is taken to build an application and assess whether that application is proving to be digitally successful.

Some firms take an overly long time creating applications that would not even get launched in the market or have widespread use. Some applications are delayed to such an extent that they become outdated and are scrapped by the firm when they are ready to be out in the market. CEOs should check the applications that deal with long timelines to measure how many applications make it to the market in the given time.

So, tracking the time spent on the applications and timely delivery are essential metrics.

Aligning Incentives to Achieve Best Digital Performance

As individuals perform their best when there are incentives linked with their performances, this metric proves to be beneficial to achieve the best digital performance by the firm. The alignment of incentives establishes accountability with the firm's digital leaders.

CEOs should check that all the individuals involved work towards the collective firm's goal, not their single unit. Interlinking and realigning the incentives among different technological leaders like Chief Digital Leader, Chief Organizational Leader, IT Manager, Chief Technology Officer, etc., empowers the mindset toward value creation.

Engaging and Retaining Top Technical Talent

One of the most crucial metrics to measure digital success for a firm is to ensure it has a quality-assured team of tech professionals. The CEOs must ensure that they don't depend entirely on their existing talents and constantly add new add-ons to the team.

Tech talents with solid expertise in data analytics, data engineering, user experience and interactions, core technology, etc., are an asset to the firm. So, CEOs should emphasize attracting and retaining tech talents for the long-term success of their firm's digital transformation.

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