How to Use KPIs to Measure Digital Transformation

Data can be overwhelming, but Mark Devereux, CTPO of workplace analytics provider Scalable Software, offers a four-step approach to using KPIs to accurately measure the success of your digital transformation strategy.

We live in a data-driven world. From businesses gathering data on sales figures and trends, to tracking our fitness through wearable devices, there has been a proliferation of measurement into our everyday lives. Data has become a cornerstone for optimizing processes and spotting areas that can improve the bottom line – whether this is boosting sales or shaving some time off your 5km.

But what about those areas that are harder to quantify? Measuring the success of digital transformation is one such area. How can you quantify outcomes? What’s the business context? And how can you really see if a digital initiative has made a difference to employees and users? Today, all of this is complicated further by the fact that workforces are now distributed, so it’s harder to see how technology is being used and whether there are any pain points.

That’s why we’ve come up with a four-step approach to using KPIs to accurately measure the success of your digital transformation strategy – regardless of where your employees are working.

1: Select the KPIs Most Relevant to Your Business

Generic measurement fails to give the insights that individual companies need. Decision makers need customizable KPIs so they can focus on the areas that are relevant to their organization and its digital transformation efforts.

For example, if you’re an engineering organization that wants to drive adoption of a high-value 3D/CAD application, you need data on who is using that app and how often it’s being used. Equally, you may only want to look at the uptake of a particular app by your sales team, rather than the whole organization. Likewise, if your company wants to make Microsoft Teams its corporate standard channel for communications, then you need to be able to drill down and see which teams are using it and how its usage compares to any other communication apps.

2: Group the KPIs by Business Use-Case

Now that you’ve selected the KPIs that best align with your goals, you need to group them by their outcome. Grouping in this way helps you focus decision making by only measuring against the outcomes you want to achieve through digital programs, and letting you see at a glance which areas are thriving or those that need more work.

For example, are you focused on cost optimization? KPIs in this category might include the volume of unused software, to highlight applications that are paid for but unused. Or category sprawl, to identify the use of multiple applications in single software category allowing for opportunities to standardize. Or are you focused on driving productivity? KPIs here could include looking at application or hardware stability to identify where devices might be running slow, or software might be crashing and interrupting workflows.

3: Measure Them over a Set Amount of Time

Change can take time to happen, particularly if you’re asking staff who are used to working in a particular way to change their habits and move to new standard applications. As an IT manager, or the person responsible for delivering digital transformation, you need to select a sensible time period to measure KPIs over before revising your strategy. This could be anything from a financial quarter to a year or more, so you can ascertain a clear ‘before and after’ picture.

It’s also important to remember that some KPIs will give actionable insights earlier than others. For example, IT will be able to see if an app is repeatedly crashing within hours of analyzing it. In contrast, measuring the uptake of new applications will take a while, as some more digitally-savvy departments and teams adopt new tech and follow new processes sooner than others.

4: Roll-Up, Roll-Down

Now you’ve got all this relevant and actionable data, the final stage is to roll-up and roll-down to see how different groups are performing. For example, you might roll-down the KPIs to see which individuals or teams are utilizing technology most efficiently and effectively. These will be your digital leaders, who you can use to drive digital transformation by testing out new digital projects on them, before rolling changes out to the rest of the businesses.

You may also want to roll-up, to get a sense for how your digital strategy is performing more broadly across the organization. For example, you might compare one region to another and see some offices and teams struggling, so you adjust a digital deployment or new project in real-time, depending on those teams’ needs.

Data Can Be Overwhelming, So Harness it with a Strategy

The key takeaway is that measuring the success of a digital transformation strategy can be an overwhelming task with access to the right data. However, if you break down the strategy into relevant metrics analyzed over a specific amount of time, it is much easier to quantify progress and gain actionable insights to inform next steps. It’s essential to have the right metrics, and assess them at the right scope. From cost optimization to employee experience, it’s important you are measuring the outcomes that are right for your digital strategy.

By Mark Devereux, CTPO of workplace analytics provider Scalable Software.

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