24
Jan

Measuring Digital Transformation ROI: A Complete guide

Measuring Digital Transformation ROI: A Complete guide

Did you know that by 2026, expenditures on global digital transformation will increase to $3.4 trillion USD? However, the success of any digital transformation initiative lies in its ability to deliver a positive return on investment (ROI).

In this blog, we will identify the essential steps and considerations to measuring digital transformation ROI:

How to Measure ROI of Digital Transformation

Steps to effectively measure the ROI on digital transformation

Define Clear Objectives

Before diving into ROI calculations, it’s important to set clear objectives for your digital transformation. Ask yourself if you aiming to boost revenue, enhance customer satisfaction, or streamline internal operations? Defining these goals provides a concrete foundation for measuring success.

Understand Budget

Digital transformation comes with associated costs, including expenses on hardware, software, ongoing maintenance, and employee training. Therefore, it become important to have a comprehensive understanding of these costs to accurately calculate digital transformation ROI. This includes labour costs related to project implementation and management, as well as other external fees.

Align Metrics with Goals

Identify specific metrics that align with your digital transformation goals. These could include things like number of active users, adoption rates, average time spent on key features, and customer retention. Aligning metrics with business objectives ensures that your measurement efforts are targeted to your goals.

Set Deadlines

To measure ROI accurately, set specific timelines for each metric. Whether on a monthly, quarterly, or project-based schedule, having predefined deadlines allows for consistent evaluation and comparison. Timelines also help in tracking progress and identifying trends over time.

Assessing Hard and Soft Costs

When determining the return on investment, consider both hard and soft costs. Hard costs are tangible and include direct monetary expenses for implementing solutions. On the other hand, soft costs are less tangible but equally significant, such as improved employee satisfaction, enhanced customer service, and reduced stress levels from automation.

Continuous Monitoring and Evaluation

Digital transformation is an ongoing process, and its regular monitoring and evaluation are important for business growth. Periodic assessments allow you to make informed decisions, identify areas for improvement, and ensure that your digital transformation efforts are aligned with your organisational goals.

Leverage External Expertise

Consider engaging with third-party experts like Ficode who are specialise in digital transformation metrics and analytics. Their perspective can provide fair insights,  benchmarking data, and industry best practices to align with your business metrics. These experts can offer a fresh outlook and help identify opportunities for improvement.

Make Informed Adjustments

Based on the insights gathered from your measurements of ROI on digital transformation, be prepared to make informed adjustments to your digital transformation strategies. Whether its refining processes, reallocating resources, or adopting new technologies, flexibility and adaptability are key to ensuring a positive ROI.

Tips to Improve Digital Transformation ROI

Here are some tips to enhance the return on investment (ROI) of your digital transformation initiatives:

  • Do analysis on ROI: Think about your target market’s environment. What important needs can your digital services and products fulfill? How can going digital enhance your workflow and reach more customers? Always focus on your organisation’s goals to make the most of digital tools and increase revenue.
  • Build ROI Model: Make sure to use estimated numbers to track all the important measurements. If you don’t have the required stats at the beginning, it may affect the business goals in the long run. So, build an ROI model and gauge upon the investments.
  • Attract the targeted audience: When gauging upon the ROI on digital transformation, it is important to focus on empowering employees and improving performance. Also, consider that having the right customers can lead to different ways to make money. By understanding your ideal customers, you can discover which digital opportunities can help you reach more people, interact with them more often, and increase sales.

Conclusion

In conclusion, measuring the ROI of digital transformation is a process that involves strategic planning, clear goal-setting, and ongoing evaluation. By aligning metrics with objectives, understanding costs, and leveraging external expertise, you can ensure that your digital transformation journey not only meets but exceeds your organisational expectations.

Looking for some expertise to help you navigate the complicated process of measuring ROI of digital transformation? Get digital maturity assessment done and let us help you!

Want to know how Ficode can help you measure ROI of digital transformation? Download this PDF.

Fill out the form, download the PDF and learn more!

    share

    Step-by-step Process of Developing a Digital Transformation Roadmap for Small to Medium-sized Businesses

    Step-by-step Process of Developing a Digital Transformation Roadmap for Small to Medium-sized Businesses

    previous-blog-arrowPrevious
    How is IoT Disrupting the Global Elevator Market?

    How is IoT Disrupting the Global Elevator Market?

    next-blog-arrowNext

    Memberships / Affiliations