Implementing a structured, big-picture digital transformation initiative is an overwhelming task for even the most seasoned CIO. Moreover, developing key performance indicators can be a crushing experience.
Tracking and measuring the viability and success of an organization’s digital transformations is a challenge that a lot of businesses try to avoid. According to Gartner, up to half of all companies have no standardized metrics or KPIs to adequately monitor their digital transformation.
Vlad Vahromovs, CEO of Intellectsoft, shares what key metrics tech leaders should keep an eye on to measure their progress.
Identifying Critical KPIs for Your Digital Transformation Can Be Complex
Identifying and implementing metrics to track and measure your digital transformation program is indeed a tricky endeavor. That’s primarily because digitizing business operations aren’t the same for every organization – which is why there aren’t tailor-made key performance indicators that just any business entity can use.
Moreover, executing KPIs can lead to some defiance or fear, since some might believe that these metrics are being put in place to critically analyze each employee, make them look bad or result in redundancies.
In addition, knowing how or where to implement these measurements can also be a problem. For example, is the CIO going to lay out the foundations of these KPIs? If so, how does the CIO plan to interpret the metrics into digestible and cohesive information for the board? You see, KPIs must be simplified in order to be optimally executable.
Keeping Information Simple Is Arduous Yet Equally Important
The crux of digital transformation lies in its capability to be incorporated throughout the departments, which is why it’s vital to first simplify the metrics and then centralize them. However, there’s no doubt doing so will make heads roll, as department managers and leaders will have to comply and move out of their comfort zone. But it’s also a truism that meaningful, department-wise key performance indicators don’t always mean the entire business is going to benefit from them.
In all, precision-based and analytical KPIs and metrics to propel digital transformation must be kept simple and should speak clearly to the senior leadership of any business. It’s the board that gets to streamline them in a way that drives better and faster decision-making. So, to keep higher-ups on the same page, the number of KPIs must be kept low.
A Clear and Absolute Purpose
The primary aim of digital transformation is to propel and enhance business operations that were previously inefficient. This is always synonymous to a critical business objective. It’s vital for organizations to be completely clear from the get-go that they’re aiming to improve facets of the business that were suboptimal. With this in mind, here are some important questions that stakeholders in any organization have to consider:
- What is the trajectory of our business?
- What is the intended destination of our digital transformation?
- What will be the advantages if we succeed?
- What do we need to get there?
Well-thought-out and structured KPIs for digital transformation are holistically linked to the success of the business and are always in line with excellent business strategy. Once an organization realizes its destination or direction – then its digital transformation will have the catalyst for the transformation it needs.
Vital Digital Transformation Metrics and KPIs for Consistent and Continuous Success
In order to measure KPIs and metrics to drive your digital transformation, it’s imperative to fragment your long-term strategy into smaller and more precision-based KPIs and metrics. Although considering typical factors such as revenue indicators and costs is important, they simply aren’t enough and a lot more is needed. That said, mentioned below are important KPIs to take into account:
Streamlined Emphasis on the Business
- Total costs associated with overall digital channels and marketing
- Your organization’s market position and rate of participation
- Consistency in digital maturation, partner experience, training and management of employees
- Revenue ratios from digital channels
- Company department involvement and level of contribution in launching digital initiatives
Streamlining Reliability and Availability
Digitizing operational processes that depend on legacy technology and/or manual operations may potentially lead to reliability issues. For instance, moving legacy-dependent factors of your business apps or information technology workloads to the cloud can pose the following challenges:
- Breakdown of workloads and app crashes
- Negative performance issues in the long term
That’s precisely why it’s imperative to meticulously analyze your system performance and keep a bird’s eye view for potential reliability problems. Here’s are some metrics that will help:
- MTTF (mean time to failure)
- MTTR (mean time to resolve)
- MTBF (mean time before failure)
The success of your digital transformation also hinges on multiple strategic investments – which will be leveraged to mitigate risks pertaining to new technology initiatives. Here are some valuable metrics to help you overcome the cybersecurity and data privacy challenges that surround digital assets:
- Volumes of data transfer
- MTBF, MTTF and MTTR
- Access frequency at different privilege levels
- The number of systems that may have vulnerabilities
Tracking progress and setting up proper metrics is as important as executing the transformation itself — otherwise there’s just no way to know if you’re moving in the right direction. It’s also important to regroup regularly to analyze the results and dynamics, and make necessary changes if needed.
Overall, digital transformation is a tricky, although exciting journey. Before starting one, make sure you have all the necessary technical capabilities or IT resources — whether in-house or outsource — to quickly leverage the benefits of emerging technologies and form a powerful business strategy.
Guest post courtesy of Vlad Vahromovs