Digital Transformation: Five Steps to Better Metrics | Sherpas in Blue Shirts

Posted On January 25, 2018

Everest Group’s recent Enterprise Digital Adoption | Pinnacle Model™ Assessment suggests that the organizations that are having the greatest success in achieving outcomes from their initiatives have a focus on a set of success metrics the extend well beyond cost savings. They include a focus on things that are relatively easy to quantify such as reduction in process cycle times. However, they also include an emphasis of more nebulous goals such as improving customer experience, introducing innovative offering, and engaging in disruptive behavior in the market.

Measuring this latter set of goals is a far departure from the familiar service level agreements (SLAs) and key performance indicators (KPIs) that IT organizations and their internal business customers are accustomed to using to determine success. Not only are SLAs and KPIs insufficient to measure the strategic impact of digital efforts, they also fail to capture the real essence of what business customers desire. While every SLA and KPI can be met, enterprises on digital transformation journeys tend to find those metrics unsatisfactory.

Five steps enterprises need to take to establish a meaningful set of digital performance metrics

1. Ensure a clear set of business objectives have been established – an objective to improve customer experience is not a clear enough metric to guide a focused set of activities and investments in a digital effort.

Within the customer experience realm, an enterprise could focus on increasing the level of consistency of the experience. In this case, the digital effort may be around automating a set of processes to reduce the variability in results and decrease the dependence upon the knowledge and experience of individuals.

If the desired improvement is to create a personalized experience, the enterprise may be more focused on ways to leverage analytics to consolidate the customer’s activity with the enterprise, make recommendations based upon the behaviors of similar customers, and predict the likelihood of purchasing.

In addition to defining the objectives, a business value should be attached to each. What is the anticipated benefit to the business, in terms of dollars and cents, were the objectives to be met.

2. Develop a quantifiable baseline for the business objective – even with a goal as vague as improving an experience, enterprises who want to ensure their activities are leading to results will find a way to quantify them. For example, if you are trying to improve customer experience through consistency, you may want to measure and set improvement targets for the level of variability in the time to serve a customer or whether the customer experience is similar regardless of the channel through which the customer engages.

3. Track the progress of adoption – while getting a technology solution implemented or a new process defined is clearly the first step, enterprises that get results from their efforts also focus on the level of adoption. These enterprises understand that without behavioral changes to use the technology and follow the new procedures the value potential of the digital efforts cannot be realized.

4. Track the achievement of the quantifiable results – once it is clear that there is a high level of adoption of the technology and redefined business processes, enterprises can begin to track the achievement of the quantifiable objectives identified in step two. Until adoption is achieved, tracking these results is futile.

5. Determine whether the desired business impact is being achieved – a critical and oft overlooked step is to ensure the achievement of the quantifiable results is delivering the desired business impact. In the age of digital transformation, the level of certainty  in effectively achieving outcomes is much lower than in times past. Additionally, the pace of change is greater, meaning that an approach that worked last month might begin to lose its effectiveness this month. Enterprises that want to achieve business results are wise to continuously monitor the impact of their efforts on their desired business results and make the necessary adjustments to both technology and business process to sustain the desired business impact.

Even in the digital era, the adage that what gets measured gets done remains solid advice for enterprises interested in not merely engaging in digital transformation activities but in achieving business results.

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