HOW TO MEASURE THE SUCCESS OF A DIGITAL TRANSFORMATION INITIATIVE
There is a tremendous amount of chatter and activity surrounding Digital Transformation and Systems Modernization in both the commercial and government sectors. Business leaders now realize that to significantly improve the services they provide to their customer base, and therefore increase revenue, their lines of business and the processes that support that business must be optimized.
At minimum, the processes must be efficient, user-friendly, and sustainable. Never have there been so many technological options to transform and modernize how your organization does business. Technology, in this instance, refers to hardware, software, services and methodologies. The list includes but is not limited to such things as:
- Cloud Hosting/Migration
- Agile Project Management
- Artificial Intelligence
- Low Code/No Code tools
- Data Lakes and Warehouses
- Machine Learning
- Multi-Factor Authentication
- Analytics and Reporting Tools
This noticeably concise list speaks to the many options available to business leaders to replace their legacy technology footprints. Additional good news is that there is an abundance of Systems Integrators, both small businesses and large, adept at executing value added digital transformation projects. Utilizing a robust acquisition lifecycle, leaders can select the proper systems integrator without destroying the IT budget.
What is missing in this discussion is the question, “what defines success in digital transformation projects?” Unfortunately, most organizations that go through a transformation process fail to define and then measure success factors for the project. If the project is considered an investment, not measuring the return on that investment is shortsighted and irresponsible. Yet, many if not most organizations fail to do this. There are several reasons this is a problem:
Problem 1: As the saying goes, “If you don’t know where you are going, you won’t know when you get there.” Failing to set discrete and realistic success factors eliminates the ability to determine whether your IT investment has paid off. A basic ROI (Return on Investment) document will pay dividends that support project success.
Problem 2: Without documented success factors that are regularly measured, the project is incapable of quickly course-correcting when things go awry. And, for mission critical projects, it is not a matter of whether things will go wrong, it is a matter of when. These success factors will allow for ultimate risk management and mitigation.
Problem 3: Not measuring the success of every project eliminates the ability to execute a sound and valuable IT Investment Management program. Such programs inform organizations on how each IT investment is performing, whether to continue to invest in a project, and most importantly, what they should invest in next to strengthen the organization towards its mission.
The following is a simple and high-level approach that will help determine if your Digital Transformation project is heading for success and when completed, determine if you achieved your goals.
Step 1. Start by answering a shortlist of questions, such as: 1) Why are we upgrading/transforming? 2) What challenges do we face? 3) What value will the transformation provide? 4) What is our budget for the project? 5) What is the total cost of ownership of the final solution? 6) What stakeholders will be served by the transformation?
Step 2. Brainstorm a list of factors or measures that will be tracked to define success.
Oftentimes, simply delivering projects on time and within budget is a major win. Adding other measures such as money saved, efficiency gained, improved customer satisfaction, and more system up-time, will pay dividends when determining if the investment paid off.
Step 3. Select acceptable metrics for each factor/measure.
Picking an unrealistic metric is pointless and sometimes dangerous. For example, suggesting your system will have 100% uptime with no service windows provided is an overly optimistic goal. While the mirroring and redundancy that cloud providers offer is real, does your business truly need to pay for such a platform? It obviously depends on your line of business. It is wise to choose your metrics carefully.
Step 4. Set up tools to capture each measure regularly and accurately.
When selecting metrics, it is especially important to determine how each will be captured. Having a metric that cannot be validated is counterproductive. When possible, opt for measures that are systemically and automatically captured. When you do have to depend on manually captured metrics, ensure that there are checks and balances in place to validate the accuracy of those measures.
Step 5. Regularly review and update measures where necessary.
Metrics and measures intended for decision-making are useless if no one is reviewing them. Be disciplined and put regular standing meetings in place to review and discuss the measures and what they mean.
Step 6. Make timely project decisions based on the analyzed metric data.
Once you have deciphered the metrics, move briskly with making project and investment decisions that lower risk and increases your overall success rate.
Conclusion
As mentioned earlier, there is no better time to invest in digital transformation or modernization to move your business forward. Not only is it no longer cost prohibitive, but there is also a vast amount of technologies and systems integrators that can successfully execute such a project.
The key, however, to invest wisely in transformation initiatives is to first identify extremely specific goals and capture metrics that inform you on the success of the project. Not doing so may result in “throwing good money after bad.”
As a small business dedicated to digital transformation, BINARC can help you identify those specific goals and aid in capturing those valuable metrics with an understanding in what those metrics mean for your project as well as for your business.
Schedule a consultation with our lead consultant now to avoid any missteps or gaps in your digital transformation or modernization journey.