Digital transformation is a process that requires careful planning and execution in order to be successful. It is essential for businesses to set their objectives and metrics in order to measure the success of their digital transformation. Common KPIs for digital transformation include revenue growth, cost reduction, customer retention, employee engagement, and innovation rate. Studies by McKinsey and BCG have shown that between 75 and 80% of digital transformation initiatives fail to reach the desired results.
The return on digital investments (RODI) is a metric that can be used to measure the success of digital transformation. This metric compares the amount of money spent on new technology, training, new hires, and other expenses related to the new technology or processes with the amount of revenue generated since the transition was made. Measuring employee productivity is also essential when assessing the success of digital transformation. It is important to define what productivity means for your business; do you want employees to reduce the amount of time spent on a certain task or do you want them to complete more tasks in the same period of time? Additionally, measuring the percentage of your company that uses AI can help you track what stage of your digital transformation journey you are at.
It is also important to consider all costs associated with digital transformation, including those related to implementing new technology and training employees. Additionally, measuring the number of licenses purchased compared to the number of employees actually using the software can help measure the effectiveness of digital projects. Conversion rates can also be used as an indication that your digital transformation journey is on track. Finally, it is important to measure organizational agility when evaluating digital transformation success.
This includes measuring availability of online presence, platform or software as a service adoption rates, and performance metrics. Any organization that measures the progress of its digital transformation will undoubtedly implement a series of measurement tools.