Every modern organization is looking to transform and reinvent itself for digital challenges and dynamic business competition. There has been an increase in investment towards enterprise-wide digital transformation and development of digital goals.
Digital product transformation is a critical challenge for organizations looking to switch their operations from the conventional path. They need to find the right people, ascertain long term goals and evaluate their existing operational efficiency to kickstart the process of digital transformation.
When thinking about fully leveraging your digital product development capabilities, companies and the management need to be quite realistic about their expectations. The main goal of digital product transformation should be to focus on improving customer experiences by harnessing digital platforms and innovative technologies.
But how can one track the digital transformation progress? What is the guarantee that product development services and initiatives will be beneficial for the organization? The best way to measure the impact of any change is to set the right KPIs or key performance indicators. But KPIs in the digital world needs to be different from conventional KPIs focusing on revenues and sales alone.
What are digital KPIs?
Digital KPIs are parameters that can be accurately measured and evaluated to gauge the performance of any digital initiative in business. Digital KPIs gives management an idea about how effective their digital strategy is panning out to be and how it is impacting the business results.
Digital KPIs stand quite in contrast to the conventional KPIs that only focus on net profits, EPS and other financial metrics. Digital KPIs are a puzzle to define, challenge to master and a hurdle to tackle when a company is thinking about digital product development and transformation.
Digital KPIs focus more on the digital efforts of the organizations and the intangible impact on other aspects instead of something that is easily seen as concrete and conclusive.
Defining Digital KPIs: Potential KPI Identification & Segmentation
As stated earlier, Digital KPIs are not quite easy to master. However, the top management can focus on two segments to define broad digital KPIs:
This segment should define how the company is faring on the digital front and what the benefits an organization has received by digitizing its operations.
This can be done by measuring specific goals in several departments like sales, marketing, customer services, operations and supply chain management. The management should keep an eye on the adoption rates of digital efforts, their digital impact and compare it to the conventional modes.
The second set of KPIs should focus on the potential new revenue sources that can arise out of digital transformation efforts. It can also include the revenues generated from the business model and can be linked to growth, revenues, market share and other financial parameters.
By comparing it with physical assets, the companies can understand the impact of digital transformation efforts, more efficiently and in terms that everyone in the financial industry understands.
Moving Ahead with Setting & Managing Digital KPIs
While traditional KPIs can keep you in line with investor expectations, it would not do much when your focus is on product development services. You need to plan according to the above-mentioned parameters, while at the same time make a few changes to your organizational structure, too.
This is essential to create a manageable and reliable tracking infrastructure so that you can have an idea about what is working and what needs more focus. Here are a few ideas on how you can manage your expectations and digital KPIs, efficiently:
Before moving ahead with digital transformation or product engineering services, you need to align your organization in a way that accelerates growth. This involves the creation of internal systems along with support functions to ascertain and evaluate client-facing initiatives.
Before rooting for digital transformation, evaluate if your organizational processes are clear, transparent and well-documented. Also, see if the existing processes are scalable when technology enters the scenario.
You need to communicate the need and importance of digital initiatives to your existing workforce. Also, the creation of a hiring system for fresh talent needs to be in place, keeping in mind the goals from your digital product development and transformation process. You will also have to bring everyone on the same page and share your goal and vision along with an understanding of the digital KPIs.
Digital transformation will surely not happen overnight. But by aligning your people, processes and projects with the digital KPIs and transformation efforts, you will be able to get the most out of your initiatives. Not only will this add efficiencies to your existing structure but will bring required robustness and agility.
The process of digital transformation or product development is completely different for every organization, based on a case-to-case scenario.
Your goals from digital transformation, digital KPIs and organization goals should be in a singular line with an underlying purpose why you are moving ahead with digital transformation. Your goals should focus on:
While developing KPIs, focus on the above pointers as well as your long-term organizational goals. This will help you get maximum value from your digital transformation efforts.
Before going all the way to push the throttle, you should always be patient and understand that not every effort you make will be successful. You shouldn’t be lured by looking at your competitors and set realistic expectations from your digital KPIs.
You don’t want to disrupt your existing business processes while you perfect your digital strategies. Pepper your KPIs with small, attainable benchmarks that would push you towards the greater goal in the long run, while keeping roadblocks at bay.
During the digital transformation process, you will need to phenomenally transform your operations at many levels. You might have to think about revisiting your online presence, embed new software and technologies, invest in chatbots and automation and do a lot more than you are used to. In such a scenario, you should be able to quickly access the impact of every change.
Instead of creating unrealistic goals from each KPI, you should focus on improving the benchmarks you have already achieved, initially. Once you are through with sailing, you can move ahead with accelerating the pace of digital business transformation.
Advantages of Defining Digital KPIs
You can’t always predict the impact of every business change accurately but KPIs can go a long way in refining your long-term strategy. Digital KPIs help you understand if your investments in digital mediums are reaping any results or not.
At the same time, it helps you ascertain if improving your existing model using digital tools is enhancing your bottom lines or not. You cannot just keep on investing without understanding what technology is doing for your business, employees or end-customers.
With digital KPIs you will be able to outline the positive impacts for all the stakeholders in your organization. Also, at the same time, you can outline a concrete strategy for the future using the insights derived from clear and accurate digital KPIs.
Digital transformation and product development is a revolutionary step for any business enterprise. With measurable digital KPIs you can get the most out of your transformation efforts. Whether you engage with a digital product development company or are moving ahead with your own software product development services, digital KPIs will help you go a long way in achieving desired mileage in rapidly transitioning digital ecosystem.
I am Namee Jani, a passionate Digital Marketing Strategist working with Azilen Technologies. I love to catch new trends and techniques prevalent in online marketing and technology world. As a marketing expert in IT Services, I loves to write and share about new technological trends in the domains of AI, IOT, Big Data and HR Tech.