While digital transformation and digitalization has been talked about for years, the COVID-19 pandemic made it an imperative for enterprises to accelerate the process and push it forward at breakneck speeds as depicted in the figure below from a McKinsey survey.
The same survey found that this was not the case pre-COVID because it was not a business priority. It also indicated a shift in thinking of top executives about the role of technology in business. While earlier cost savings ranked as an important priority of digital strategy, now it is not so. In fact, now competitive advantage is quoted as a prime reason for investment in technology.
With so much focus on digitalization, the question to be asked is what is the measure of success of a digital transformation program? What is the Return on Capital and Effort Invested? Before we go there, let’s list down what plagues enterprise digitalization initiatives. The usual list of suspects is High Capex, Long duration, Inside-out vision, to name just a few.
Given the above and the frenetic pace of changes that businesses need to keep up with, just to stay relevant, business leaders are looking at easily identifiable and measurable Key Performance Indicators (KPIs) for a digital transformation program. So how does one go about choosing the relevant KPIs for the program? The place to begin is to be clear about the objective of the transformation effort and linking it to specific outcomes. Because of the speed of change and possibility of getting disrupted, business leaders need the implementation to be quick and outcomes to be visible almost immediately. We are now talking of weeks, not months and certainly not years.
Below are some (not exhaustive list) of the KPIs that can help measure the success of a digital transformation program depending on its stated objectives –
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Customer experience improvement
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Addition to top line – revenue attribution
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Reduction in TAT (turnaround time)
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Customer grievance redressal time
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AHT (average call handling time)
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Increase in STP (straight through processing)
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Improved NPS (net promoter score)
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Number of Leads generated
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Productivity / Efficiency increase
Last but not the least, business leaders would be well advised to keep the human aspect in mind when devising the objectives of digitalization because its success or failure can depend on how well the initiative is structured & evangelized and eventually how well it is received by the employees.
And finally, selecting the right technology stack makes or breaks a digital transformation initiative. The earlier approach of selecting COTS products and customising them to business needs and or to go for bespoke development does not work in the current digital milieu that requires real time solutions. A business KPI driven all-in-one modularised automation platform incorporating a conversational interface, integration layers, no code workflows and analytics capabilities is the better choice for leaders across the size spectrum, looking to undertake digital transformation.
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