Metrics, and why they’re in place, must be understood by the entire business. Source: Shutterstock

Why KPIs are crucial for digital transformation success

The challenges of digital transformation are well documented. Delays, setbacks, scaled back expectations, and even failure, seem to come hand-in-hand with initiatives – every organization is different, there is no one-size-fits all approach. 

Few organizations would disagree that digital transformation is now vital, but part of the problem is that progress (or a perception of it) can be hard to track – how do you know how well your business is doing with digital transformation if you have no benchmarks to work from?

Key to organizations’ digital transformation struggles is having no proper framework for measuring success. 

Having the right success metrics or KPIs is a common challenge across the board. According to Simon Piff, Vice President of IDC’s Security Practice Group in Asia Pacific region, a misguided approach to measurement is a ‘key deadlock’ in transformation.

“All too often people measure the wrong things, such as system uptime, network availability and the number of threats revoked,” said Piff.

“These are all nice, but do not drive business value.”

When it comes to creating efficient digital KPIs, simplicity is key. KPIs must be structured in a way that can be easily understood by the entire organization – not just the IT team – with a clearly defined causal relationship to a business outcome. 

“KPIs of the digital age need to be around time to provision new services, rate of innovation, and new digital products,” Piff said. 

Creating digital KPIs are undeniably tricky. There is no standard set of KPIs to choose from; each organization is unique, what works for one may not work for another. But all digital transformation KPIs should be understood and explainable by the entire business – and progress in meeting them should be transparently and regularly benchmarked. 

KPIs should always be about measuring what matters to the business, and business leaders must always keep a clear vision of their organizational goals and culture in mind while drawing up meaningful KPIs.

It should be clear by now that well-defined KPIs are key in determining a company’s digital success. Success is built on consistent monitoring and course correction, thus, not having clearly structured transformation measures could be detrimental.

Organizations must be proactive when it comes to embracing and addressing change.

Digital transformation, noted Piff, is a choice. Businesses must be intentional in spotting trends, and choose to disrupt their own business models by creating new opportunities with technologies that are well within their reach.