Table of Contents
- Why are classic KPIs no longer enough in a digitized world?
- Digital Transformation KPIs as a success factor for corporate governance
- User behaviour and customer satisfaction as a starting point
- Digital Transformation KPIs as a target method and control tool
- Agility and optimization as a corporate strategy
Digitalization is changing our business world and increasingly presenting entrepreneurs with new and complex challenges. In order to be able to keep up with the increasing change requirements, it is important to process, evaluate and implement new knowledge quickly. However, the speed of these processes means that many top managers and decision makers use little or no metrics that can help them target and manage the digital transformation. This behavior is avenged by missed opportunities or costly mistakes. There are a variety of key performance indicators (KPIs)that can be used quickly and easily, especially in the digital field. But which metrics are suitable for digital transformation, how time-consuming is it to measure this data, and how can digital metrics be combined with classic metrics most efficiently?
Why are classic KPIs no longer enough in a digitized world?
Traditional key performance indicators are arguably one of the most important control tools to keep a company on track. The smart figures provide the basis for trend-setting decisions and also show the direct link between costs, sales and company profit. However, digitalization requires a rethink in traditional performance management. After all, how do you measure innovations and how can data about reach and visibility be meaningfully integrated into the existing management system and related reporting? This new and often unknown area requires completely different key figures, which are also known as Digital Transformation KPIs.
Digital Transformation KPIs as a success factor for corporate governance
With the help of Digital Transformation KPIs, it is possible to summarize the digital success of a company in figures. In contrast to traditional key figures, the Digital Transformation KPIs focus on relevance in every measurement that directly influences the target method. This relevance can be derived and assessed from different metrics. The actual performance measurement can be carried out via own internal platforms as well as via existing external portals. For example, IT giants such as Google, Facebook and Amazon already offer their users meaningful dashboards with standardized metrics that allow important conclusions about the company’s digital performance management. Regardless of the platform chosen, however, it is crucial that the metrics are integrated into the value chain throughout the company and are always analyzed and evaluated in direct connection with existing key figures.
User behaviour and customer satisfaction as a starting point
In order to measure relevance, it is necessary to record and assess the behavioural changes of the users. For example, it is possible to evaluate click rates or search results via Google Analytics or other platforms. Those who operate many digital channels have the option to aggregate the data of the different channels on an internal platform and integrate it into the existing dashboard. For example, both user behaviour and customer satisfaction can be measured and evaluated homogeneously before, during and after an online marketing campaign. Unlike traditional metrics, Digital Transformation KPIs enable optimizations to be performed much faster, allowing the company to adapt its digital offering and objectives more quickly to changing market conditions.
Digital Transformation KPIs as a target method and control tool
Which key figures are of particular interest in the course of the digital transformation, each company has to decide for itself. Thus, the internal progress of digitalization as well as the industry, the objective and the product range influence the priority and the weighting of the individual key figures. In recent years, however, individual key figures have emerged as standard metrics for simpler comparability, which means that most external platforms measure them.
- Click-through rate
- Conversation Rate
- Bounce rate
- Length of stay
- Return rate
For the goal setting as well as the management system, it is also interesting to relate different metrics to each other. For example, the relationship between visitors who visit the website only once and users who return regularly is a good indicator of the effectiveness and attractiveness of the website. In addition, quantitative and qualitative signals should not be missing in any dashbaord. For example, it is important for management to have data on how many comments, likes and shares individual posts generate, and the relationship between positive and negative reviews also allows important conclusions to be drawn about the performance management and quality of the digital business.
Agility and optimization as a corporate strategy
The basic prerequisite for any effective performance management is the regular evaluation of the existing data. The digital business unit offers the advantage that the necessary key figures are constantly available in real time. For maximum efficiency, the key figures should be evaluated at a predetermined rhythm, whereby it is helpful to keep a close eye on the key figures, especially before, during and after the setting of different measures. In addition, regular comparisons with the figures from previous periods also help to correctly determine operational goals and optimize them if necessary. This approach forms a strong foundation on which future decisions can be rooted.
Those who cannot quantify their target method also miss the opportunity to scale measures correctly and optimize processes and offers. However, digital transformation KPIs make measures taken in the course of digitalization measurable. The compact and precise summaries facilitate goal setting and thus influence the company’s strategy. However, for maximum effectiveness, it is necessary to link the figures to a fixed target value.
This is the only way to see which goals have been achieved and which measures have led to failure. Digital Transformation KPIs are thus skilfully implemented to manage the digital business sustainably and to make success measurable.