Digital transformation – Measuring Success is Still Tricky

Digital transformation – Measuring Success is Still Tricky

A lack of strategic vision, an output-focused approach, and the challenge of tracking multiple digital touch points can sabotage all digital transformation efforts. So, focusing on the right metrics is the key to success.

Digital transformation should always start with questions and ‘whys.’ This lack of clarity towards a well-defined goal, sometimes even the absence of a goal – is way too common – not only with digital transformation initiatives but also in a broader context of transformation programs and strategies.

If businesses lack the understanding of how to measure their transformation success, they should stop, rethink where they are heading, or just start from scratch.

It is exceptionally critical to focus on the below metrics instead:

Measure clear strategic goals and targets

Currently, there is a limited competitive advantage that digitalization can deliver across industries. Digital transformation is a journey on an endless road; the goals and target metrics are continually shifting.

And these goals should be shared and realized by each member of the organization. The goal should be high-level, such as driving efficiency, engagement, or matching customer compliance requirements. Mapping the change and its impact on processes, people, and tools is vital, to show how realistic and achievable the goal is.

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People transformation is the real digital transformation

Digital transformation will only be worth it if it changes the behavior of employees and customers. Successful digitization is often measured by the tools and software implemented by the organization. The most vital pre-requisite is that the employees need to understand the purpose of the transformation positively, and respond to the change.

And, the way employees respond to the efforts directly correlates with the outcomes set for the transformation.

For internal transformations, the potential outcomes to consider are:

  • Improved efficiency
  • Enriched employee engagement
  • Lower customer churn
  • Enhanced legal or contractual compliance

The best way to build a high-execution culture with internal digital transformation goals is to change the way people lead and work around the new tools.

Changing everything all at once is never productive

It is vital to choose an iterative approach to digital transformation. Remember, if everything is equally important, nothing really creates a difference.

Every digitization goal includes different touchpoints for various individual end-users, creating confusion for the members who are not aligned to the end goals. Every incremental digitalization initiative needs to have a person or team responsible for it – the CTO, CIO, or CEO, or perhaps the internal services organization if that drives internal efficiency.

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Considering disruptive innovation, it should take place where the past ways of doing things are possible, typically in a separate innovation unit.

Measuring all feedback – both positive and negative

Continuous feedback and employee experience are both necessary to map the transformation journey; to assure that the efforts are going in the right direction.

Sharing positive feedback is usually straightforward and useful for most businesses. But negative feedback can also be equally beneficial, helping enterprises with their transformation methods and signaling the dynamic changes that the companies undergo.

However, too much of either can hurt the progress, indicating a broader problem at the organizational level: Either one can keep the negative feedback at bay and focus only on the positives, creating a culture of fear, or one can focus only on the negative and forget to celebrate the positive stuff, which can destroy motivation, creating a compliant culture.

Transparent reporting will alleviate such problems. When the changes implemented start showing business impact, it will motivate teams to drive the transformation initiatives. It is also critical to have a strong justification for reporting to other C-level managers who wish to know how their transformation journeys are progressing.