Tag: metrics

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

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.

Related: See our latest research on digital transformation readiness

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.

Breakthrough Metrics for Solutioning a Customer Transformation Journey | Sherpas in Blue Shirts

There’s no silver bullet for driving change; it’s a challenge in any organization and services providers and their clients struggle with this. In working with providers and buyers on transformation deals over the years, I observed the need for breakthrough metrics to drive the change through the buyer’s organization.

As I mentioned in my previous blog post, transformation needs to start with defining the business outcome goal from the customer perspective and then translating it into issues and organizational implications that the delivery organization can align against. Those issues include metrics that you must clearly articulate at three levels in the buyer’s organization:

  1. C-level vision – Here the highest level of metrics calibrate the benefits and what needs to change in the status quo to accommodate the benefits. In the event you find you can’t get to the goal with what you conceive for the journey, you need to start again and conceive the journey differently.
  2. Direct reports responsible for executing on the vision – These metrics focus on the implications for the delivery organization.
  3. Technical talent – Metrics at this level focus on the tools, talent, and process changes that the goal affects. What are the details that the architects need to understand as they solution the goal?

Having metrics at each level puts business transformation not in light of those who are doing it but, rather, those who are experiencing it.

Service providers need to keep in mind that this shouldn’t be a roadmap with a detailed plan. But people at each level in the client enterprise need assistance in understanding what they are trying to do, how they have to measure themselves against that goal, and what the implications are to technology, talent, policy, process, and sourcing. The metrics can’t be prescriptive.

If you’re an executive, you can break through your organization’s obstacles to change by driving change through the benefit goal and the metrics that allow the organization to understand and configure against the goal. First define the experience you’re looking for. Then ask how to accomplish that. You’ll end up with a set of metrics that defines what you have to do to get to that experience.

As an example, let’s say you want to improve the speed of the employee onboarding process. What are the technologies you have to put in place? What talent issues do you have to think through? What policies and processes do you need to think through? What are the consequences of changes to those technologies, talent, policies, and processes? Now you have the metric and sub-metrics that help guide those implications.

Once the client organization is committed to the transformation journey at each level, the service provider can then engage with them around how that should be done.


Photo credit: Flickr

Transformation Services Procurement: What’s Wrong with this Picture? | Sherpas in Blue Shirts

For large transformation projects, the services world has locked itself into a world permeated with high dead deal costs, wasted solutioning, and long transitions of nine to 18 months where the client sees low value and tries to get the provider to absorb the cost as well as expensive consultants and legal fees for the client on top of distracting management. And in the end, we have a lot of unhappy clients. This needs to change.

Remember John Lennon’s song: “Imagine?” Imagine a world in which we compress these cycles and we don’t have high transition costs. As Lennon wrote, you may say that I’m a dreamer, but I’m not the only one. Over the years there have been a lot of experiments in how to shorten the sales cycle. But largely they were frustrating. Even when you rush through the process, it still tends to straighten back out to the nine-plus months’ duration because it takes time for the enterprise to understand and absorb the journey and get to decisions. Others have experimented with sole sourcing, but it doesn’t really shorten the sales cycle and has a lot of limitations from the client side in terms of leaving them wondering whether they got a market deal, despite benchmarks and pricing assurance.

From studying this over the years, I’ve come to believe that as long as providers and clients define the goal in terms of procurement, they’re likely to be disappointed. The process and price become too influential and the provider loses sight of the client’s real goal. So they end up with incremental gains but not breakthrough, transformation gains.

Let’s think about these deals as transformation journeys instead of procurements. Just imagine ….

After all, the client doesn’t want the outcome to be a contract; the outcome needs to be a transformed state of the client’s process or capability. So we need to reconceive the origination of these transformation deals along this line.

We need to first focus on the benefits, defining the game-changing benefits the enterprise wants to build. Typically those benefits in today’s world have something to do with efficiency gains, cost savings, better aligning the process to the requirements of the business users, and improving the speed and agility to be responsive to the business needs.

If service providers stop thinking about the procurement process and think from the consumer’s point of view, it works great. The client gets what it wants and needs, friction is reduced, it’s clear what the client needs to reach its goal, and the provider gets to pull the client on the journey rather than pushing and selling to the client.

After defining the business outcome goal from the client’s perspective, the next step in developing a solution would be to develop breakthrough metrics to drive the change through the client’s organization. I’ll discuss this in my next blog post.

The parties build the journey together, and the client sees the solutioning as value rather than a sales exercise to be viewed with skepticism. In effect, this method turns the procurement process on its head and eliminates the sales cycle. The provider get paid to assist the client in solutioning rather than for building a complete construct to be compared to competitors’ solutions and examined at every level.

The result is a better outcome, focused not on contractual terms but on results for the client. And this process goes a long way to eliminate the nettlesome issues around the procurement transition phase because transition is accomplished as the transformation journey progresses. Just imagine.

In John Lennon’s words, I hope someday you’ll join us, and the world will be as one.

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