Successful digital transformation can make enterprises more competitive and agile in today’s dynamic market.
But as most CIOs agree, digital transformation can be challenging to implement, and it's not a one-day or one-week task. It requires serious commitment from business leaders, training, financial investment, change management, a well-defined strategy, and KPI monitoring.
Over 70 percent of digital initiatives fail; the biggest reasons are unclear goals and the inability to track progress.
50 percent of businesses do not define digital transformation metrics or key performance indicators (KPIs) to track their success. However, 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.
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.
Here are some crucial questions you need to ask yourself while choosing the right digital transformation metrics:
Implementing digital change is not enough; you need to be able to determine if your efforts are paying off. Measuring the advancement of digital transformation provides critical insights and allows you to identify areas of improvement.
Set the goals of your digital transformation plan from the start; don't treat it as an afterthought. Defining what digital transformation means to you will make it easier to know what to look for as the program progresses.
With this in mind, establish the key performance indicators (KPIs) to measure the digital transformation progress. Every KPI you decide to track must tell a story relevant to the set goals of your digital transformation plan.
Finally, you must collect relevant data and use the right tools for analyzing the data and generating reports consistently.
Digital transformation is a top-to-bottom transformation of how your business operates and delivers value. Implementing it has far-reaching implications for your company’s customers, work culture, and organizational structure.
Digital transformation will also affect your finances, bottom line, and relationship with partners and stakeholders. Measuring digital transformation progress requires setting metrics for these different areas to get a comprehensive view.
Here are some key KPIs to track to measure your digital transformation progress in 2025.
One of the ways to measure the effectiveness of your digital undertakings is to check how it affects your customers. After all, every digital transformation plan aims to build a loyal customer base. Measuring customers' overall experience with the digital changes you’re making to your products, platforms, and processes will be crucial for the long-term success of your plan.
Some of the vital customer-focused KPIs include:
Digital transformation aims to improve employee productivity. The ultimate goal is to get employees to do more in less time and with less effort. But introducing new technology does not always guarantee this.
Sometimes, digital change can complicate processes, making employees less productive. As a result, measuring the impact of your digital initiatives on your team is necessary.
Some of the key employee metrics to measure include:
Note that different organizations measure employee productivity in different ways, which means you have to determine what improving employee productivity means to your organization before establishing employee KPIs.
These metrics measure how well your teams learn and adopt the digital solutions you have introduced. If these KPIs are low, it could mean users are having a hard time connecting with your digital solutions, leading to low yields in projected output.
Some of the learning and development KPIs to track include:
Financial KPIs measure the financial implications of your digital transformation initiatives. The metrics associated with these KPIs estimate the cost of your digital initiatives and how much it impacts your bottom line. While returns may take some time to appear, you must measure them to ensure you’re getting your money’s worth both in the long and short term.
Some of the major financial KPIs to track include:
These metrics refer to the technological and innovation strides the organization makes with its digital transformation efforts. They provide insights into the pace of digital adoption and the results achieved with this adoption.
The key technology and innovative metrics include the following:
Project management KPIs are metrics used to measure the progress of specific digital transformation projects to ensure their alignment with the organization-wide transformation goals.
Some of the key metrics to track include:
Digital transformation initiatives impact your organization’s overall structure and culture. The organizational change metrics measure the progress of these initiatives and their overall impact on the organization.
Here are some key metrics to track in this context:
The business process KPIs track the impact of digital transformation on the organization’s internal processes and workflows. These metrics indicate areas where digital transformation is yielding positive results and the areas that still need improvement.
Business process KPIs include:
Your digital transformation goals directly impact the choice of KPIs.
For instance, if the purpose of transforming your business is to improve customer experience, you have to look for metrics related to customer satisfaction, process efficiency, and user engagement.
External factors like industry dynamics and market conditions can also impact your chosen KPIs. For instance, when there is ongoing market disruption or competitive pressure from other players within your industry, you may have to pay more attention to the financial implications of your digital initiatives or how well those initiatives drive innovation within the organization.
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.
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Kissflow’s built-in analytics and reporting features help you derive crucial insights and track the metrics that matter to your digital transformation journey.