Maintaining a competitive edge in the crowded business-to-business (B2B) space means businesses have to continuously adapt and evolve to cut through the noise. Digitization requires businesses to pre-empt disruption and build transformation into their business model in order to stay ahead.
For organizations, embracing digital transformations can improve efficiency and aid in profitability and growth. However, less than 15% of companies are currently able to quantify the impact of their digital initiatives. A huge opportunity exists to gather learnings on which areas of digitization are proving successful and or have a detrimental impact.
Digital transformation should not be considered as an optional business add on. Instead, decision makers need to accept and elevate it to become an encompassing process that accounts for the needs of partners, employees, suppliers, and customers. For a transformation to be fully internalized and thus successful, it needs to be integrated at all levels of the business. The best way to achieve this is through dedicating time to a planning process. A comprehensive plan not only allows identification of the most urgent areas for improvement but ensures investment dollars are allocated wisely and accurately.
Ensuring your business is setting the correct goals for digital transformation will support measuring the success of these metrics. Understanding the overall goals and objectives for any digital transformation program such as revenue targets, increased customer satisfaction or improving specific business practices will drive the business towards the correct path to maximize on the initial investment.
The final step in this planning process is to determine digital transformation metrics. Doing so not only provides guidelines and structure to business objectives but also delivers insight into where adjustments are necessary in order to maximize results. Key metrics to track success include:
- Increased revenue: Revenue might be the most obvious means of identifying the success of an initiative, and for good reason. If the revenue’s up, then it must be effective. However, to draw a clear conclusion, run a comparison of sales figures, both before and after a digital transformation project. By taking project costs into account and isolating other variables, business leaders can quantify the return on investment and determine whether digital initiatives have had a positive boost to bottom line.
- Productivity improvements: Examining revenue per employee will provide insight into whether the new technology has had a positive or negative impact on their productivity. This metric will highlight the impact of hiring or losing an employee. To achieve an accurate measure of productivity improvements, organizations need to be mindful to determine which employees interact with the new digitized system and then assess how the revenue attributed to those employees has changed.
- Resource streamlining: This metric ties back to the importance of an initial planning process. It requires the operational procedures that will be impacted most to be identified prior to transformation and costs associated with them calculated. This will allow business leaders to easily pinpoint areas where resources have been streamlined as they move through the digital transformation. Decision makers should also consider examining the speed at which the cost of digital investment is being recouped in order to garner insight into whether the changes implemented are also supporting customer needs.
- Operational enhancements: Implementing automated technology solutions to complete tasks traditionally requiring employee oversight will free up time to be dedicated to value-add tasks that boost revenue. Businesses should see a boost to ROI as employees are able to focus on building relationships with customers and enabling increased opportunities for up-selling. Monitoring the speed at which these enhancements take place will also isolate the value of the transformation.
When conducted strategically, digital transformation can have a range of positive business implications which all contribute to the goal of improving customer service and retaining loyalty. Implementing a clear plan and measurable goals from the outset improves speed and efficiency, allowing decision makers to be prepared for the outcomes from specific initiatives. Ultimately, the true value of metrics lies in highlighting trends and providing learnings that ensure the business is successful not only in digitizing processes but in staying ahead of customers’ needs.