A Guide to Measuring the Success of Digital Transformation
This is the second installation of our digital transformation (Dx) blog series. We will focus on how companies can use digital transformation and ways to measure the success of its implementation.
There are, of course, no hard rules on digital transformation. Every company has unique needs and preferences regarding how Dx can be applied. But one is sure that digital transformation is reimagining the ways businesses work. So sit back, relax and allow us to provide you with essential information on how digital transformation can make your company stand out not just in the eyes of your customers but to your internal stakeholders, too (yes, we’re talking about your employees and investors!).
Why is There a Need for Digital Transformation?
For one, companies gain better resource management, more ideal customer experience, and other essential business benefits from digital transformation. When companies adopt digital transformation, they experience the benefit of a reduced time to market. This way, companies can easily quantify the overall timeline and incorporate tools and enhanced company-wide culture to market their products or services in less time. For example, consider a tech company that capitalizes on a mobile app for its services and plans to release a new mobile solution to its customers.
Conventionally, the company would have to go through a manual and inefficient end-to-end process. However, if the company invests its resources to improve the deployment through digital transformation, it can deliver continuous incremental features and mobile capabilities to its customers faster.
Just imagine if you have a construction company where you normally deal with multiple vendors and suppliers. Typically, you’ll grab your notebook and list all materials you need from them individually and then log every single transaction with suppliers. But with digital transformation, that manual work can be done seamlessly with simple software that can automatically sort the inventories and orders for you. It doesn’t just save you time and money, but it takes away the stress and complicated manual process from your hands.
What Metrics Should Companies Consider in Measuring the Success Rate of Digital Transformation?
When implementing a company’s roadmap to digital transformation, there needs to be key metrics and quantifiable measures to assess the performance to track the progress. Given the scale and complexity of digital transformation, measurement is critical to give confidence that all investments and efforts are paying off.
Company leaders should identify the metrics of success to assess digital progress, so you don’t end up draining your company’s cash for investments in ineffective Dx tools and processes. It is imperative that in obtaining successful digital transformation implementation, company leaders should embrace it and articulate a clearly defined strategy1.
Here are the key metrics to monitor the journey of digital transformation:
- Successful implementation of new initiatives related to digital transformation
It is crucial that every initiative launched and implemented create value not just for the customers but for internal users of the organization as well. Leaders in companies should be keen on assessing the impact of digital transformation tools, processes, and shift of culture to identify whether the invested time, money, and resources enable companies to capture its benefits. Consequently, not all investments in digital transformation may result in desired outcomes, and for some investments, it might take time to see the positive impact on the company.
- Top technical talent attracted, promoted, and retained
Hiring and retaining exceptional tech talent is one of the critical drivers of long-term success in today’s digital age2. The creative aspect of digital transformation lies entirely in the workforce. If businesses can utilize human adaptability to upskill their employees, it will benefit the simultaneous co-working relationship between humans and technology. In this case, companies should include in their digital transformation key performance indicators (KPIs) the number of attracted, promoted, and retained talents. Companies can gauge how their tech talents are reacting to the transformations being implemented by assessing how their current employees are engaging. Also, companies should have a metric to know if potential recruits are more interested in joining the company because of their investments in digital transformation. And lastly, companies must keep track of how current top tech talents are incentivized by their contributions3. Promoting tech talents who commit and add value to the company will enable loyalty and a culture where employees feel valued.
- Time required to build a digital product or a feature
For some tech companies, time-to-market deployments of new products and features are critical to respond to the needs of the market. Since companies are in the race to keep up with customers’ wants and needs, they cannot afford to have delays or overcommit. With digital transformation, companies can benefit from advanced technological tools, processes, and required skills to speed up their deployments while considering quality, efficiency, and collaborative ways of working. The time needed to build a digital product or feature is one of the essential key performance indicators (KPIs) in digital transformation since this will reflect the degree to which all elements of a tech company are seamlessly integrated.
How Can NuBinary Help?
With the changing trends in the business world, it is becoming more and more necessary to embrace business digital transformation. Digital transformation is the way of the future. But, to succeed in this ever-changing environment, you need a partner who understands your business and will help you get there. With NuBinary’s Fractional CTO services, we can assist you in bringing digital transformation to your business. We are a team of passionate professionals committed to providing solutions that align with your goals. Get in touch with NuBinary by visiting https://nubinary.com/work-with-us.
(1) Iansiti, M. (2022). Democratizing Transformation. Harvard Business Review. May-June 2022 issue, page 43.
(2) Frankiewicz, B. et al (2020). Digital transformation is about talent, not technology. Harvard Business Review. https://hbr.org/2020/05/digital-transformation-is-about-talent-not-technology
(3) McKinsey Digital, (2021). How do you measure success in digital? Five metrics for CEOs. https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/how-do-you-measure-success-in-digital-five-metrics-for-ceos