Digital transformation has become the latest in tech jargon and it’s thrown around so frequently that it gives you a feeling that every other company is adopting it. Unfortunately, what most people don’t realize is that there is another side of digital transformation that nobody talks about. Despite all the hype, the majority of digital transformations fail to achieve their goals. Yes, you read that right. Digital transformation is the process of applying different advanced techniques to promote your brand on the right platform. By utilizing a professional SEO service from a digital agency you can increase your sales and turn traffic into revenue.
According to a study conducted by McKinsey, 70% of all digital transformation initiatives fail. There are various reasons for it. From employee resistance to stakeholders’ lack of interest, the list can go on. One of the reasons very few people pay attention to it is the lack of clearly defined digital transformation key performance indicators(KPIs). If you are one of those businesses that don’t have clearly defined metrics to track the progress of your digital transformation initiatives or don’t know which metrics you should track, then this article is for you. This article will highlight six digital transformation key performance indicators that you should keep an eye on in 2023.
6 digital transformation KPIs to track in 2023
Return on investment
Probably the most obvious metric is the return on investment. It is usually the first thing your top-level executives and board members will ask you when you try to get their buy-in for digital transformation initiatives. You have to provide it with hard numbers or make them visualize the true benefits of digital transformation to get a green signal from them.
They want to see a clear correlation between the money they’re putting in and the money they will make. Since digital transformation can go through many ups and downs. It is hard to calculate the exact number so you will have to rely on estimates. Make sure the estimate does not divert too much from the proposed numbers.
Time to market
Just like money, time is another important factor. If you want your digital transformation initiative to make an impact on not just your company but also your industry, you will have to rely on speed. Especially in a highly competitive environment where businesses try to outdo one another. It will come down to who brings the product or service faster to market.
Businesses that get the first-mover advantage when it comes to introducing innovative products and services usually take the lead and go on to become the industry leader. Make sure your digital transformation initiatives are time bound. This will not only keep your team motivated and focused but also help your business bring products faster to the market. The faster you can bring your products and services to the market, the better chance you have to keep the customers engaged. The more engaged customers are with your brand, the less likely they are to switch to other brands. This not only helps you build brand loyalty but also assists your brand in retaining an existing customer base.
Person hours to working prototype
With the emergence of low-code and no-code tools, better data integrations and automation, businesses can now reduce their time to market. This is great news but there is another side to it that most businesses tend to overlook. When you leverage all these tools and automation, you are also forced to reduce your costs and deliver faster results.
Even if you are creating a minimum viable product, it should integrate seamlessly with your existing application stack to take full advantage of it. This way, you can reduce the technical debt as well as ensure faster deployment. By measuring how many hours a person works on a given prototype will help you calculate the workload as well as the resource requirement of the project. It can also give you an idea about how quickly you can drive your digital transformation initiatives to completion.
Dollar to working prototype
Once you have finalized the human resource requirements for your digital transformation project, it is time to track the cost of developing a working prototype. The best way to do that is to keep an eye on a metric called dollar to working prototype. It basically tells how much money is spent on the development of a working prototype. Once you know the cost and human resource requirement, you can easily calculate the total cost of the digital transformation projects as they are two factors that contribute to the cost of a project.
Both time and costs are interconnected. The longer the duration of your digital transformation initiative, the more it costs. This means that you can save a lot of money. By accelerating the process of digital transformation and completing your digital transformation faster. Even if you succeed in completing projects a few weeks faster, it can make a huge difference to the overall cost of the project.
Let’s say, you have successfully created a product, launched a service, or digitally transformed your company. How would you tell if the product or service you launched is successful or not? Simple, by looking at the adoption rate.
The faster your adoption rate grows, the more successful your product is. A higher adoption rate also goes to show that the product or service is fulfilling the customer’s requirements. You can apply the same rules to employees as well. How many employees are using and benefiting from your digital transformation initiatives? If the number is higher and all the users are getting value, it is a clear sign that your digital transformation project has achieved success.
Even the higher adoption rate can be misleading sometimes. Let’s say you signed up for Anti DDoS service but it is hampering your employee productivity, it kills the whole purpose of creating the product or service in the first place. You need to make sure that your digital transformation initiatives are helping employees achieve more in less time. After digital transformation, employees should be able to do their work more efficiently. If that is the case, then your digital transformation initiative has managed to hit its target.
Digital transformation can be quite tricky to measure and track. This article has highlighted six digital transformation key performance indicators that you should keep an eye on in 2023 to improve your business.