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Digital Transformation

8 Digital Transformation KPIs to track your progress in 2023


By 2024, 55% of all ICT investments[1] will be digital transformation investments. Digital transformation is using digital technology to improve your company’s performance, transform existing business processes and services, or create new ones. Digitization aims to meet changing business and market requirements, cut costs, enhance operational efficiency, and workplace productivity, and create a better customer experience.

Despite digital transformation offering various benefits, only 30% of digital initiatives achieve their objectives, with many failing to deliver on time, business value, and within budget. The biggest reasons for this are unclear goals and not tracking progress. Measuring digital transformation helps you track your digital journey and prevent you from going off course. 

Digital transformation metrics mean the key performance indicators that tell how your users/employees are engaging with specific apps or platforms. The popular digital transformation metric is adoption rate which means the number of active users compared to the total number of users.

50% of businesses[2] do not define digital transformation metrics or key performance indicators (KPIs) to track their success. But investing thousands of dollars without quantifying returns is counterproductive. Assessing the right metrics helps you determine whether you’re implementing best practices or not, and if you’re gaining the intended value from the process. 

Since any area of your business can be transformed, creating KPIs for digital transformation to measure business success is difficult. These important digital transformation KPIs to track your journey can help you draw closer to your digitization goals.

Calculate the ROI of Your Digital transformation Efforts.

What are the important Digital Transformation KPIs and metrics to track?

  1. Usage Metrics
  2. Productivity
  3. Cost and Investment
  4. User Experience
  5. Customer experience
  6. ROI
  7. Digital Adoption
  8. Performance

How to choose the right KPIs for your digital initiative?

The best digital transformation KPIs are tied to your business's health and are part of a sound strategy. Quantifiable goals lay the proper foundation for accurate KPIs. To keep your goals at the forefront of decision-making, link your KPIs and metrics directly to improving specific business outcomes.  

KPIs linked to core business objectives help employees stay focused and make better, data-based decisions. Clear goals also simplify your digital transformation metrics, making them more realistic. Connecting your KPIs to strategic goals also helps you quantify only the most important metrics and prevents you from wasting time, energy, money, and other resources.

Choosing KPIs and metrics that best align with strategic goals and reflect different business areas help you understand its overall health. The quality of your KPI for digital transformation determines how effective your business is at tracking progress toward goals.

The process of choosing the right metrics requires in-depth knowledge of the business processes, employees' capabilities, investment, and objectives of an organization. 

Questions while choosing the right KPIs: 

Here are some crucial questions you need to ask yourself while choosing the right digital transformation metrics:

  • Can the KPI be easily understood and measured?
  • Does the company culture and values align with the team’s work?
  • What is your KPI’s desired benefit or business outcome?
  • Does the metric address a specific, clearly defined audience?
  • Where is your team today, and what’s your intended digital destination?
  • How is your digital strategy integrated with the general strategy?

8 Digital Transformation KPIs to Track your Journey

1. Usage Metrics

The active usage metrics of digital assets provide information on how users are engaging with your technology and if there are any issues with the platform. Some crucial active usage metrics are: 

  • Daily active users (DAU): it measures the total number of users who log on to your platform on a given day. You can also measure weekly active users and monthly active users.
  • Conversion rates: it measures the percentage of users who start and complete a certain activity or action. 
  • Abandon rates: these measures the percentage of tasks or activities started, but not completed. High abandon rates mean there's an issue with your process that needs remedying. Conversely, high conversion rates may be a sign your digital transformation journey is progressing well.

2. Productivity

Digitization can boost employee productivity, helping them do more in less time. But it can also be complicated and make your teams less productive. Employee or workforce productivity refers to the value or volume of output per employee in a given period. The amount of work your team does and the complexity of tasks should increase after a successful digital transformation. Ultimately, this translates to higher revenue or profit per employee.

Define what productivity means to your company, then quantify it. Is it getting employees to complete more tasks at the same time? Do you want to decrease the time they spend on certain tasks? Calculate the revenue each employee generates and use this information to understand if digitization has freed up employee time to focus on more meaningful tasks. Invest in the right digital transformation tools to increase productivity and then evaluate the tool by the results over a certain period of time.

Tracking employee productivity helps you measure the efficiency of digital transformation. If your employees are engaged throughout the process, can optimize work hours, and carry out complex tasks more efficiently, you’re headed in the right direction.

3. Cost & Investments

By 2024, direct digital transformation investments will reach $7.8 trillion[3]. Done right, you can increase revenue from digital investments. Track the amount of money you’ve spent on technology and calculate what percentage of digital investments influence revenue. 

The cost-benefit KPI for digital transformation helps you determine which components are worth the investment and what to focus on first. Conducting a cost-benefit analysis compares the costs and rewards of different scenarios to determine which is most likely to pay off. If you’re likely to get a quick ROI from a certain process, it makes sense to invest early and reap the benefits faster.

4. User Lifetime

A reliable digital presence helps you build a strong brand reputation. If you’re providing a platform or software as a service and your online presence is constantly unavailable, adjust your digital transformation plan. When you retain customers, you can generate more revenue. 

Additionally, if the platform your team uses is constantly failing, it lowers productivity and makes it impossible to support your customers properly. Digitizing your business model requires evaluating your organization’s availability to customers and employees. 

5. Customer Experience

Building a loyal customer base begins with providing an excellent customer experience; it’s an essential brand differentiator. Frequently measuring customer engagement and conversion metrics helps you track how well users are navigating new processes and how the digital platform is performing. 

Getting feedback on user experience is the best way to see how well customers are embracing new technology. With this, you can make adjustments and improve the likelihood of success in your digital transformation initiatives. Addressing pain points on time, and improving the platform, will improve customer experience and engagement.

6. ROI

45% of companies report higher net revenue growth as a positive digital transformation business impact. Quantifying digital transformation return on investment (ROI) helps you determine if you’re getting your money’s worth from the new technology. It involves comparing how much you’ve spent on new technology, processes, training, and other related expenses vs how the digital platform has improved your business bottom line. 

Calculating ROI in the long term is better because digital transformation returns can take time to appear. Not every digital investment will yield the desired outcomes, and not every positive outcome is impactful. The benefits of digital technology incorporated into the organization must outweigh the cost of resources like time. 

7. Digital Adoption

Success in digital transformation requires understanding new technology, sustainably adopting it, and integrating it into your work. Adoption defines how well your employees are using your digital transformation tools. It's an important business transformation metric because a high digital adoption rate is key to success. Adoption metrics give you an idea of how well your team is adjusting to the new platform or particular features.

Poor adoption may be because your platform has complex functionalities or your users need additional training. Employee engagement reduces change resistance, leading to faster adoption. Without engagement, your digital transformation efforts are worthless. Your organization's digital maturity level determines the success of integrating new technologies into the organization. 

8. Performance

Performance and rate of innovation can help you assess business efficiency. Successful digital transformation brings technology-supported changes to your business model, product offerings, processes, and systems which boosts customer value and secures growth. Measuring the performance KPI for digital transformation provides information on where to simplify processes or provide more training. 

Evaluate the number of processes currently running on new software and how that has increased the volume and value of outputs compared to resource investment. Also, assess your platform’s performance for potential reliability issues. The most common performance metrics are:

  • Uptime: the total time your platform functions 
  • Mean Time to Failure (MTTF): the average time an asset functions before its first failure. It's used for non-repairable system failure and shows the reliability of the system.
  • Mean Time to Resolve (MTTR): the average time to identify and resolve the cause of failure
  • Mean Time Before Failure (MTBF): the average time between two failures.

Kissflow to Empower your digital transformation with the right KPIs

Digital transformation is an ongoing process that requires continuous assessment to identify pitfalls and stay on track. But, measuring too many metrics is confusing and can make progress a challenge. To achieve your digital transformation goals, choose KPIs specific to you, your team, and the organization. Keep your KPIs achievable, otherwise, you set your team up for failure. 

Kissflow's digital transformation platform can make your transformation journey easier. Our intuitive interface keeps your employees and customers engaged while helping you track the metrics that matter to your digital transformation journey. Kissflow’s built-in analytics and reporting features help you derive crucial insights, make necessary adjustments quickly and improve efficiency and collaboration.

Related Blogs on Digital Transformation

1. How Digital Maturity enables Digital Transformation in your organization?

2. Digital Transformation Journey: Where does your business stand?

3. Digital Transformation solutions for your digital operations

4. Gartner on Digital Transformation: Investment, People, Future and Statistics