2024 Digital Trends updated
Digital transformation has accelerated remarkably since 2016, evolving from a strategic initiative to a fundamental component of business resilience and innovation. Back in 2016, the emphasis was largely on the adoption of digital technologies to improve processes, enhance customer experience, and drive operational efficiencies. Companies were exploring digital channels, cloud computing, and data analytics, but often in siloed, experimental ways.
Fast forward to today, and the landscape has undergone a seismic shift, propelled by the global pandemic, emerging technologies, and changing consumer expectations. According to recent reports from McKinsey & Company, digital transformation is no longer just about technology; it's about reimagining business models, integrating advanced technologies like AI, IoT, and blockchain into the core of business operations, and fostering a culture of continuous innovation.
Gartner highlights the rise of hyperautomation, the Internet of Behaviors (IoB), and distributed cloud as pivotal in enabling more agile, resilient, and customer-centric organizations. The pace of change has intensified, with companies now prioritizing digital agility and scalability to not just compete but to lead in a rapidly evolving marketplace. This evolution reflects a deepened understanding that digital transformation is a strategic imperative that extends beyond IT, encompassing every aspect of the business and requiring ongoing commitment and leadership to adapt and thrive in the digital age.
Digital transformation is inevitable, according to an MIT survey of C-suite executives. Almost 90% of respondents expect at least a “moderate” digital disruption within the next few years, and many of them are already gearing up for the change. 56% of CEOs told Gartner they’ve realized increased profits from digital improvements, and 41% have seen an increase in market share. Despite these gains, some leaders are uncertain about managing digital transformations. Their main point of contention is the difficulty in tracking performance.Digitization involves retraining staff, reshaping corporate culture, and redirecting workflows into more efficient patterns as much as it does investing in new technology.The variety of changes effected by the process means that the usual KPIs can be interpreted in misleading ways.Such inconsistency makes it hard to assess the true value of digital transformation. This perceived lack of data is a serious challenge to adoption.69% of CEOs cite uncertainty about expected ROI as a fear when putting together a business case for further investment.Behind this lack of data is a simple yet pervasive fact.The single most common reason companies have trouble assessing their digital initiatives is they they haven’t clearly outlined their definitions of success.
A Lack of Clarity
42% of CEOs describe their company’s business strategy as digitally driven, but there’s not a consensus on how those victories are being tracked.In fact, 47% of CEOs had no metrics in place for evaluating the success of their digital transformation.Charting revenue is the traditional indicator for most, though that method shouldn’t be used alone.Without the CEO's guidance as to what should be tracked, CFOs don’t separate digital profits from other revenue streams as a matter of course.Only 49% do so, and 7% of those measure and publish their results.
Defining Metrics For Success
Creating assessment guidelines must be done on an individual basis. Every organization doesn’t adopt technology at the same pace, in the same order.One might focus on improving internal procedures first while another upgrades their analytics software.To accurately estimate the value added by digital transformation, leaders should tailor their criteria based on their data strategy and current level of digital integration.These are some common areas of focus- besides revenue- that CEOs can look to for inspiration.
- Conversions
- Operational Costs
- Customer Satisfaction
- Website Behavior
- Corporate Climate
Conversions - Judging revenue may be misleading, but web-originated conversions are a reasonable metric.They also tend to be the easiest to showcase to shareholders or Board members who question the value of digital transformation.There are several simple extensions that sort incoming traffic according to the campaign that generated it.These extensions can follow visitors to the point of purchase, providing a clear visual of performance.The percent of quote requests, live chats, and internet phone calls that result in a personal or phone meeting is also useful to track.
Operational Costs - A core aspect of digital innovation is automation. Repetitive and tedious steps can be managed or eliminated by machine learning programs and other software.Some experts estimate that with the right combination of data science techniques, up to 90% of routine IT functions can be handled by machines instead of humans.That may sound like bad news for employment, but companies overwhelmingly prefer to retrain employees rather than let them go.They save money on labor even without reducing staff.Consider this: IT professionals work an average of 49 hours a week with 18% putting in more than 60 hours. With routine tasks delegated to machines that overtime can be eliminated.Plus, technicians have time to focus on upcoming projects rather than scrambling to keep up with housekeeping tasks.CEOs may consider reduced payroll, lower utilities (and other costs associated with overworked staff) and benefits gained from “bonus projects” as part of their success metrics.
Customer Satisfaction - Gartner predicts that by 2020 customer experience will have overtaken all other factors to become the most important brand differentiator.Consumers naturally gravitate towards retailers and other service providers who offer a low-stress interaction.How can CEOs measure customer satisfaction without reading through surveys? Conversions are one way, but more telling would be a rise in customer engagement.Organizations with good digital strategies experience 37% more online customer engagement than before their transformation.
Website Behavior - Tracking website behavior is particularly relevant when evaluating customer service chatbots, digital marketing campaigns, and other online programs.Programs such as Google Analytics capture detailed website behavior that shows specific benefits gained through digitization.Record information such as returning vs. new visitors, page views, time spent on site per visit, mobile users, and the overall path to either leaving the site or making a purchase.Increases here are good indicators of a well-designed strategy.It’s useful to note whether the bounce rate falls after implementing new digital marketing or customer acquisition programs.If there’s a rise in customers leaving the site immediately after reading the landing page, this is a signal that something may be seriously wrong with the underlying algorithm.Corporate
Climate - The hardest to measure benefit of digital transformation is also the most powerful.Companies who manage smooth digital transformations have happier employees, more creative low-level managers, and key leaders with a stronger commitment to the ultimate success of the company.One way to measure this change is to check retention rates among mid to senior level executives.This group holds a strong belief that digital technology is relevant to their future careers. 30% of them plan to leave their current position within the next year in order to hone their skills in a more innovative digital environment.Having a significantly lower rate implies leaders are fulfilled by the company’s digital strategy.
Moving Forward
Creating these metrics will provide a more comprehensive view into digital transformation, giving CEOs the viewpoint needed to make sound decisions.Much is at stake; a lack of cohesive leadership is a leading cause of the two thirds of data initiatives that fail. Conversely, well-informed leaders are a key element of success.A third of companies have long-term plans overseen by involved advocates at the C level. CEOs who can evaluate their progress are in the right position to make sure their organization makes it into that prosperous third.To have a sound strategy, CEOs should enlist the help of senior management. Read how a CEO, CIO, COO can join forces to embrace a digital transformation.
Concepta can help you take the measure of your digital transformation. Contact us for an in-depth consultation!
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