The KPI Conundrum: Are You Really Moving the Needle?
Recently, our SFG team participated in an informal panel discussion with product and service companies to talk about the best metrics to understand digital transformation progress, challenges and failures. The consensus of the group’s discussion is that leaders today advocate action-oriented and defined approaches to measurement centered around revenue or the customer. It’s no longer the era of implementing a new system and simply hoping for long-term ROI to show up in a non-specific indicator six months later. So how do you do it?
If you aren’t measuring the right things during a digital transformation, is the needle really moving?
Successful transformation simply must be driven by tangible goals with outcomes in mind from the start. But a big challenge centers around what to measure in order to quantify success. Are transformational initiatives streamlining the business, delivering on product or services, and monetizing efforts? The argument for using traditional KPIs is to tap metrics already in place so data will be consistent with stated corporate goals. On the other end of the spectrum, many standard KPIs may be too traditional for the changing digital landscape and won’t correctly analyze the information that transformational advancements create. In addition, it often takes too long to harvest and analyze the data. Many in the group complained that their metrics are outdated, oriented to infrastructure or basic service and simply no longer relevant, or altogether nonexistent.
Can We Solve the KPI Conundrum?
A few of the more experienced members of the panel said that data collection, feedback and monitoring work best when it is intrinsic to the DT effort itself, with two to four data collection points at critical release junctures, feature activations and phases for client/customer response about satisfaction and service.
These are all big questions for today’s IT leaders. In fact, the Wall Street Journal recently looked at how IT executives are finding value in real-time metrics. According to the WSJ, as CIOs need to prove the value of IT as a revenue generator, metrics are key. New tools are allowing CIOs daily visibility into their organizations.
Across the board, both panelists and audience members agreed that alignment on quantification is instrumental to success and progress, as is early course correction, in digital projects. The bottom line is that every business, and every transformation, is unique.
Defining your expected outcomes from the start is key to how you can measure more effectively to actually see the needle move on your transformation progress.