One of the foundations of a successful digital transformation is to ensure you have good metrics to measure success.
In this article, we will review what metrics mean for your digital transformation, what metrics are needed and how to use metrics for the success of your digital transformation.
1. First, Let’s Define Metrics
Metrics are the measurements of your digital transformation initiatives and projects that help you track and report progress, identify issues, address risks, make adjustments where needed and ensure your transformation is progressing in the direction of success.
Each business is different, so is the digital transformation for each company. First, you have to define what metrics would be meaningful for your stakeholders, which would include your board of directors, executive leadership and your staff.
You can also use industry standards as a starting point. Many times, you can borrow the key metrics from your peers in the industry as a starting point. The bottom line is to decide to capture measurements that will ensure your digital transformation can be tracked.
2. Various Types of Digital Metrics
At the beginning of your digital transformation journey, while you are defining your strategy and roadmap, you also need to identify the key performance indicators (KPIs). These will help the teams identify what metrics have to be measured, what data has to be captured and how the metrics data has to be interpreted and reported.
It may be a good idea to categorize your metrics into internal and external metrics. Internal metrics would be the measures that will be needed to run your projects, grow your digital products, measure team success, the performance of the portfolio and track internal progress.
External metrics would be directly related to your business and customers like customer engagement, customer satisfaction, return on investment, total cost of ownership, etc.
3. The Data Behind Digital Metrics
The KPIs will be a starting point to your metrics collection. Once you have them, you may want to break it down to various categories that will help you gather the details. The categories can be financials including budget forecast and actuals, scope of the projects, schedule of your initiatives, investments, customer categories and other important categories you may need.
It will be very important to ensure the metrics captured are accurate. It is also important to ensure the metrics data is continued to be tuned. In some cases, you may have an abundance of raw data that has to be normalized to help your stakeholders with understanding the metrics. Normalizing can include removing outliers, aggregating data, removing bad data, etc.
The key is to ensure the data behind your metrics is accurate and meaningful to your business.
4. The Power of Meaningful Dashboards
Successful companies have successful metrics management. There are many digital tools available in the marketplace to capture the metrics data, synthesize the information and present it in a meaningful dashboard to your stakeholders.
A good dashboard can be very powerful. We all use dashboards in our daily lives. Just think of any mobile apps or websites you use where you see a graph or a colorful representation of data. It can be a bank website, a stock trading app, a COVID-19 map or an e-commerce site. All these dashboards are delivered to us to understand certain data in a meaningful way.
Similarly, you can create dashboards for your teams which can be granular in nature with a lot of details. A higher level dashboard with less details can be presented to your executive leadership team and a much higher level dashboard with just the highlights to your board of directors.
5. A Word of Caution
In a previous article on “Digital Transformation Mistakes to Avoid,” we mentioned avoiding the mistake of not measuring progress.
Often the interest in creating metrics fades and it just becomes numbers. Sometimes, metrics are not taken seriously until a serious failure is encountered. Other times, there is just too much data presented to the stakeholders, the real progress or lack thereof is not realized.
Make metrics part of your culture. Every key conversation should be metrics-driven. Your organization should move towards data-driven decision making. Ask your stakeholders what they would like to see and measure. And continuously enhance your metrics for a successful metrics-based digital transformation.