From increased online customer engagement to digital tools that can dramatically improve communication, collaboration, and efficiency, it’s apparent that businesses that don’t digitize their processes and services will suffer a significant competitive disadvantage.
Many businesses have been pushed to reinvent and expedite their digital transformation strategies as a result of the COVID-19 outbreak. Since 2019, efforts to digitize and optimize business processes have made significant progress. Big enterprises are being forced to reassess their digital transformation strategies as the speed of digital innovation and business disruption has intensified.
There are a number of key performance metrics that should be evaluated in order for a company’s digital transformation efforts to be considered effective. A successful digital transformation isn’t a box that can be checked: It’s a never-ending process that necessitates regular assessment and development.
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With that in mind, here are three critical digital transformation questions to consider.
The goal of a digital transformation is to increase productivity by allowing employees to work more efficiently. Companies should monitor whether their digital transformation strategy is achieving its objectives: Are employees more engaged and productive than they were earlier? Have automating tasks saved time for more strategic initiatives? Has there been an increase in productivity?
According to a 2019 report by McKinsey, “Twenty-five years of digitization: Ten insights into how to play it right”, digitization, automation, and artificial intelligence (AI) might add US$13 trillion to global GDP by 2030. However, in order to reap the benefits of this windfall, businesses should be able to identify whether their digital transformations are performing as expected.
These are reminders that digital transformation managers should commit resources to assess if these transformations are meeting their objectives, gain employee buy-in for the implementation and tracking process, and maintain a focus on clear success indicators throughout the process.
Revenue growth, along with employee productivity, is one of the most obvious indicators of digital transformation success. According to the 2020 PwC Global Digital IQ Survey, 66% of businesses believe that if they didn’t digitally transform swiftly enough, revenue growth and profitability would suffer. The companies that made the most efficient digital transitions had a 17% better profit margin increase than their rivals over three years, according to the same survey.
Companies should not only look at whether revenue increased or decreased when evaluating their digital transformations. They should compare sales before and after the transformation, taking into consideration project expenditures, changing economic and market conditions, and other factors. This will give them a clear picture of the transformation’s financial impact.
It doesn’t mean the transformation was a failure if the return on investment (ROI) isn’t immediately obvious. Hidden costs are frequently connected with digitalization, and businesses should be agile enough to absorb them and evaluate whether they need to change course.
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Integration is key to successful digital transformations; if employees don’t adopt new technologies, digitization will be more of a hindrance than an asset.
Companies should determine whether and how employees are using new software throughout a digital transformation journey in order to make informed decisions about which technologies to deploy and where. They will be able to audit old systems to see which ones add value and which ones are no longer feasible using this method. It’s critical to create a digital integration strategy that utilizes legacy systems as much as feasible while eliminating those that cost more than they yield.
Businesses can have the most advanced technology in the world, but it will be useless if employees refuse to use it.
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Umme Sutarwala is a Global News Correspondent with OnDot Media. She is a media graduate with 2+ years of experience in content creation and management. Previously, she has worked with MNCs in the E-commerce and Finance domain
