Perhaps the hardest part of implementing a digital transformation is knowing whether it’s contributing to the success of your business. Since digital transformations are implemented for many different reasons, your KPIs (key performance indicators) may be different. We’ll cover three different goals of a digital transformation and what indicators you can use to measure their success.
If You Wanted to Improve Operational Efficiency… Measure Reliability and Speed of Components
One of the most common reasons for a digital transformation is to make your operation more efficient. This can be very important to a manufacturing business that wants to cut maintenance costs, or even expand their operation. But how do you know if you are more efficient after the transformation? You can track metrics such as uptime (the amount of time a piece of equipment has been running without failure – or an average based on a time span), mean time between failures (MTFB), and production time from start to finish of one product that will give you a good idea of any increased efficiencies.
If You Wanted to Increase Revenue… Measure Revenue Made Before and After a Digital Transformation
Many businesses implement a digital transformation to make more money. The easiest way to track whether you are successful is to know what you made before, then compare the two. While this won’t tell the whole story, as more than just your digital transformation is responsible for the revenue your business makes, it can give you a good idea of whether the digital transformation has contributed to driving more sales.
If You Wanted to Improve Customer Satisfaction… Measure Customer Experience Metrics
Sometimes a digital transformation is undertaken to improve the relations with your customers. Whether that was because you wanted to provide more products, faster to your existing customers, or because you wanted to improve customer loyalty, success is determined by a few key KPIs:
- Customer Satisfaction Score: How happy a customer is with the service or product you provide. This can be tracked with surveys, reviews, or even the number of referrals you get.
- Customer Retention Rate: How long your customers stay with you. When this number goes up, then you know your customers are more loyal.
- Customer Churn Rate: The opposite of retention, when this number goes up, you know there’s a problem you need to fix to keep your customers coming back.
No matter what your goal is for your digital transformation, make sure the metrics or KPIs you’re tracking make sense to track your success.
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