Business Metrics

Digital Transformation Metrics That Work for Everyone

The standard, time-tested key performance indicators (KPIs) are not so good at measuring the impact of digital transformation, which means new metrics are needed. What types of metrics will work for every business though? In an article for, Stephanie Overby discusses metrics that can illuminate three different areas of transformation:

  • Operational improvement
  • Customer experience
  • Financial impact

Measured Growth

A substantial aspect of operational improvement is whether people are actually buying into the change, so adoption metrics measured weekly will be useful. But when looking at strictly the technical end of things, “speed to transform” can be an important KPI when it is informed by the right assortment of sub-metrics. This KPI also offers a measure of value that would be missed by traditional ROI-centric metrics.

Customer experience meanwhile is an area of business that is prone to using vanity metrics (e.g., YouTube views perhaps), so naturally, you want to avoid this. The important things that you should be measuring include share of voice, customer acquisition costs, and customer lifetime value. And more generally, you also want to be measuring how much effort it takes customers to “get something done” with you. The quicker and simpler the interaction, the better.

Lastly, Overby shares this example about the right metrics to watch for financial impact:

For David Gee, CMO of Zuora, whose SaaS business is built around enterprise software subscribers, the magic financial metrics are annual recurring revenue, recurring profit margin, and growth efficiency. “Tracking growth efficiency, or how much it costs to acquire $1 annual contract value, gives companies a sense if they effectively transforming,” he said in an interview with

It’s critical to look for financial measures that provide incentives for the entire enterprise to embrace ongoing digital change, ISG’s [Michael Witty] said. For example, one retailer is measuring gross margin by category, rather than by channel, to track how well the organization is working together to drive sales. That financial data complements operational metrics for channel integration and customer-focused KPIs measuring share of wallet, loyalty, customer growth, and cross-channel satisfaction.

For further examples of these metrics in action, you can view the original article here:

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