KPI Digital: The keys to measuring the success of digital transformation

Most CIO have no metrics to measure the success of digital projects, such as new mobile applications or chatbots.But the CIOs that fail to quantify these initiatives can be overcome by more agile rivals, analysts say.The key digital performance indicators (KPI) are a way to follow the progress of the transformation.But to avoid the loss of time and resources, the CIO need to ensure that they know what they are managing and what they intend to achieve.

"The greatest limitation of digital KPI is the lack of a clearly defined digital strategy," says Gartner Paul Proctor analyst A CIO.com."Having a clear idea of your digital strategy will offer you some ideas of what you should measure to measure evolution and progress.You can't measure something for which you don't have a metric."

What are digital kpi?

Digital KPIs are metric to evaluate the performance of digital business initiatives.Digital KPIs can help an organization to determine how much it has progressed in their digital strategy and to what extent the results of their digital businesses are improving.

Traditionally, companies have measured business performance based on net profits, earnings per action and other metric street metric, which rely on the KPI, such as inventory rotation, production quotas and customer satisfaction.

Digital KPIs are more difficult to define, since companies in various industries have different ways to quantify their digital initiatives.In addition, attaching the word "digital" can make the meaning of those kpi diffuse.

How to define digital kpi

Gartner's Proctor says that the CIO must create digital kpi pointing to two major categories.The first set of KPI should evaluate the progress of the company in the digitalization of its current business model by measuring sales, marketing, operations, supply chain, products/services and customer service.For example, many retail companies and other sectors use chats to digitize orders.CIO must evaluate these digital operations using metrics that evaluate adoption rates and commercial impact in relation to traditional operational modes.

A second set of key performance indicators (KPI) should evaluate growth: income, market share and measurement of digital platforms.These digital income flows must be evaluated separately from analog flows to assess their impact on the final result.

Digital KPI Adopters

Business leaders will complain that estimates of digital maturity are based more on anecdotes than on specific data, according to the general director of Servicenow, Chris Bedi.To quantify his company's progress to automate repetitive tasks, Bedi created a system that calculates how the company progresses in its digitalization process.Although Bedi does not describe it as such, it is a digital kpis measurement model, according to Gartner.

The model begins with a questionnaire, that HR, IT, sales and other business groups apply to each process, such as automation, employee transfer from one department to another, or the supply of laptops.The responses are coded by colors and are presented on a visual heat map detailing the digitalization metric for each process, with variables such as the inclusion of real -time analysis and automatic learning algorithms that influence the score.A low score throws a level 1 rating, described as "clumsy, slow and frustrating", while getting a level 4 indicates that the company is using platforms to automate and execute the work.In this sense, companies do not have to fear getting trapped at level 1;Score cards trigger recommendations with the aim that business lines can increase their score.

To know how their customers interact digitally with their brand, TGI FridayMityas.In addition, Fridys closely analyzes the interactions that consumers have with their chatbots, including the number of conversations and their duration, which gives mityas a better understanding of how the processing of natural language works for consumers who try to "talk about" speaking"With the platform.Visits to the pages, clicks and frequency with which a consumer has completed or abandoned his purchase complete the KPI of Fridays."It's not always perfect, but when you try something and it doesn't work, you learn," says Mityas.

The industrial manufacturer Schneider Electric uses the digital KPI to track anything, from the cybersecurity position of the company to the number of personnel that identifies as “digital citizens”, which consume technology in a casual way, to the “digital disruptors”,Those who conceive and defend changes in business processes.

KPI Digital's best practices

Only half of the CEO that Gartner has surveyed have kpis to measure digital success, says Proctor, who recommends several steps that CIO can take to measure the value of their digital business:

-Trabar with high -level executives to quantify the extent to which their areas would benefit from digitalization.A CIO could work with a coo to define how many manufacturing operations of the company should be digitized and what benefits can be expected.

-Stage key performance indicators (KPI) and objectives that define the path of the digital company and acute the expected commercial results.For example, Proctor recommends that health cios go from talking about connected health care as a vision to propose the potential percentage of "visits" of patients who will use telemedicine, and then describe the expected benefits of achieving this goal.

-Mery the progress of your digitalization process and the business value that you create.In this case, some key performance indicators will be "transient", while others will become permanent metrics for business performance as transformation is achieved and digital business becomes a standard operating procedure.For example, a company that builds a digital ecosystem can permanently add ecosystem to its current business performance KPI.Good metrics should influence the decisions of the C-SUITE, such as budget allocations, the improvements of business processes and changes in culture.

-Use the KPI to support the expectations of specific results, such as, "by achieving our goal of digitizing the ABC by 2020, we will benefit from an X increase in these business and financial metrics".KPIS must influence business decision making.Kpis should inform course corrections.For example, as a company approaches 50 percent of customer calls through an automated system, the net Promoter Score of customers can fall materially, indicating the need to invest more in the system orto change technology.Good kpis will inform the need to change before a material loss occurs.

The benefits of digital kpi

There are no magical formulas for the success of digital businesses, but kpi can help.

"The digital KPI is to understand where money is being gained or improving an existing business model, how to measure it and work with non -computer executives to achieve new business results that have been established based on the fact that it is going on toDigital, "says Gartner analyst."Outside that all you have is a collection of new projects that are using technology to do new things and unfortunately is where most business are today".There is a lot at stake so that CIOS and executives C-LEVEL cimiento a digital strategy in which Kpis is intended to measure their effectiveness.The interruption occurs in a market once digital income reaches 20 percent of the total."If you are not [reasonably] digital at that time, you are 'dead,".