As businesses across the world begin to adopt digital transformation (DT) to leverage smart technologies to drive operational efficiency, it is vital that CTOs are able to show the tangible results of these interventions to their relevant stakeholders. Digital transformation KPIs help organisations align their digital strategy to their overall business objectives and help IT teams strive for benchmarks to ensure continuous growth.
As we highlighted in our previous digital transformation article, the 5 key aspects of a sound DT strategy framework focus on the following:
- Customer experience
- Operational agility
- Culture and leadership
- Workforce enablement
- Digital technology integration
As such, here are our top digital transformation KPIs for each category to help you stay on track with your DT goals and objectives.
Customer experience KPIs
- Customer Effort Score (CES): Measures how much effort is required from customers to perform a task.
- Net Promoter Score (NPS): Indicates how likely a customer is to recommend your product or service to friends and family.
- Customer Satisfaction Score (CSAT): Measures how generally happy and satisfied customers are with their experience.
- Time To Resolution (TTR): Indicates the average period of time it takes for your customer service department to resolve an issue or provide detailed feedback to a customer query.
These can tell you a lot about how successful your DT strategy is performing by how it is impacting your customers, and provide insight into the areas which require improvement.
Operational agility KPIs
- Number of agile business process per department/company-wide
- Number of business processes digitised per department/company-wide
Digital transformation initiatives require an agile approach in both mindset and process. In order to successfully adopt digital processes, businesses need to identify which aspects of their operations are able to be replaced by digital tools and processes to improve efficiency. The number of processes that can be converted to digital is a great measurement of how your DT strategy is progressing. If most of your important business functions can be agile and digital then you are hitting your DT targets.
Culture and leadership KPIs
- Number of DT advocates in management/leadership
- Employee morale feedback reports
- Number of new DT business processes and approaches conducted by organisation
It is imperative that management and C-suite executives foster a culture conducive to a DT mindset that opts for calculated risks and innovative approaches. Digital transformation means a cultural evolution in the mindset of all employees, thus it is important that business leaders make every effort to instil these values into their workforce.
Management can track employee motivation and morale through quantitative feedback to gauge whether the culture conversion is successful and which areas require further improvement. Additionally, organisations can keep track of the number of IT leaders in management positions who lead the DT charge within the organisation. Of course, the more of these a business has, the closer it will be to achieving its overall DT business objectives.
Workforce enablement KPIs
- Number of employees receiving training for new DT processes and tasks
- Number of specialist IT recruitments
- Number of resources and infrastructure created conducive to DT initiatives
For any digital transformation rollout to work successfully, businesses need to ensure that they are hiring the right people for the job. Above this, they need to ensure that existing employees are given the required training and understanding to perform new tasks required for the DT process. HR must be given a mandate to secure highly qualified and specialist employees who are able to operate digital processes and establish a DT framework for the organisation to follow. A good benchmark for this is to see how many employees are currently hired as digital specialists in order to fill the gaps where needed.
Digital technology integration KPIs
- Number of new digital tools and processes adopted
- Percentage of digital integration
These KPIs track your rate of digital innovation. Digital transformation requires the adoption of digital tools and processes to improve efficiency and most of all, business resilience to unexpected changes and challenges. This means the adoption and implementation of digital processes into new and existing business frameworks, workflows, systems and processes, etc. Therefore, keeping track of the number of digital integrations within the business framework will show how much you are transforming digitally over time. Innovation rate KPIs are a great way to assess the return on your digital investments.
DT revenue KPIs
- Cost of DT initiatives ÷ total revenue derived from DT initiatives
- Process time pre-DT ÷ process time with DT initiatives
Of course, the most important and obvious digital transformation KPI focuses on the amount of revenue received from new DT initiatives. Businesses can calculate the amount of revenue derived from DT initiatives and compare them to the cost of setting up the digital initiatives to get an indication of the true financial value of digital transformation. These numbers can be made more impressive when businesses calculate the costs of performing these tasks prior to the DT process to also show how much time was saved thanks to automation and digital technologies. After all, time is money in the world of business.
The issue around the concept of KPIs is that they differ for each business according to many factors: business type, offerings, scale, etc. However, when any business big or small undergoes the digital transformation process, these KPIs are a good place to start. The next step is getting more granular with your approach to how you measure success and failure within your organisation.