In order to properly judge the success of a digital transformation initiative, it’s important to establish key performance indicators (KPIs) upfront. This article discusses five KPIs that are essential for measuring success. By tracking these KPIs, organisations can make sure they are on track to achieving their desired outcomes.

Defining digital transformation

Digital transformation can be defined as the process of using digital technologies to create new, or modify existing, business processes, culture, and customer experiences to meet changing business and market requirements. This shift to digitisation is inevitable and irreversible.

In order to survive and thrive in this new era, businesses must begin their digital transformation journey. But where do they start? How can they ensure that their transformation is successful?

There is no one-size-fits-all answer to these questions. Every organisation is different and will need to tailor its approach based on its own unique circumstances. However, there are some best practices that all businesses should follow if they want to succeed in their digital transformations.

The impact of digital transformation

There is no doubt that digital transformation has had a profound impact on businesses across all industries. By automating manual processes, digitising information and workflows, and connecting employees, customers and partners with real-time data, businesses have been able to achieve unprecedented levels of efficiency and productivity.

However, the impact of digital transformation goes beyond just operational efficiencies. It has also had a profound impact on the way businesses compete. In today’s hyper-connected world, customers have more choice than ever before and can easily switch between brands. To win their business, businesses must be able to provide a superior customer experience at every touch-point.

Digital transformation is a business journey that involves the adoption of new technologies to drive organisational change. As organisations embark on this journey, it is important to identify key performance indicators (KPIs) that can help them measure progress and success.

Key performance indicators for digital transformation

KPIs are metrics that help organisations understand whether they are making progress towards their goals.

There are four KPIs that businesses should focus on: customer experience, operational efficiency, employee engagement, and revenue growth.

Customer experience

Digital transformation is helping businesses to improve customer experience in a number of ways:

  • One of the most important is by providing a more personalized experience. By understanding customer behavior and preferences, businesses can provide a more customized and relevant experience that meets their needs.
  • Digital transformation can help businesses to improve communication with customers. By using data and analytics, businesses can identify customer pain points and address them in a timely manner. This can lead to improved customer satisfaction and loyalty.
  • Digital transformation can help businesses to streamline processes and reduce costs. By automating tasks and improving efficiency, businesses can free up resources that can be used to improve customer experience. This can lead to greater profitability and sustainability in the long term.

While there are many possible KPIs that businesses can track, the following are four examples of customer experience KPIs that can be particularly helpful:

  • Net Promoter Score: This score measures how likely customers are to recommend a company’s products or services to others.
  • Customer Effort Score: This score measures the amount of effort required to handle a customer service issue, such as calling a call centre or visiting a store.
  • Customer Satisfaction: This score measures how satisfied customers are with the overall experience of dealing with a company and the degree of customer satisfaction with a company’s products or services. More than just the Net Promoter Score, this is a more inclusive measure of customer experience that factors in both positive and negative interactions.
  • Customer Acquisition score: This score measures how easy it is for a company or digital product to attract new customers.

Operational efficiency

This is another important KPI for businesses undergoing digital transformation. By automating manual processes and leveraging data and analytics, businesses can improve their operational efficiency and save time and money. There are many ways to measure operational efficiency, but some common KPIs include:

  • Time to complete a task
  • Number of steps required to complete a task
  • Number of errors made during a task
  • Amount of time spent on rework or corrective actions
  • FTE reduction
  • Direct cost savings (i.e. contracts, printing,..etc).

Employee engagement

This is another important consideration for businesses undergoing digital transformation. Employees need to be bought into the vision for the transformation and feel empowered to do their best work.

  • Digital transformation can improve employee engagement by automating HR processes, reducing communication barriers, and improving collaboration. For example, automating HR processes can reduce the administrative burden on employees and free up their time to focus on more strategic tasks. This can lead to increased employee satisfaction and engagement.
  • In addition, reducing communication barriers between employees and managers can improve collaboration and allow for more open dialogue.
  • Finally, improving collaboration among employees can lead to better workflows and increased efficiency.

It’s more important than ever to have KPIs in place to measure employee engagement. Here are some examples of how you can do this:

  • Use surveys to gauge employee satisfaction and identify areas for improvement.
  • Track employee retention rates and compare them to industry benchmarks.
  • Implement an employee recognition program and track the number of awards given out.
  • Conduct regular focus groups or one-on-one interviews with employees to get feedback on their experiences.
  • Analyse social media mentions of your company to see how employees are talking about their work publicly.
  • Compare data from employee engagement surveys before and after digital transformation initiatives are implemented.
  • Use HR analytics to track changes in employee engagement over time.

Revenue Growth:

Revenue growth is the most important business goal for most organisations. A digital transformation can help turn a company’s revenue growth potential into reality. By improving operational efficiencies and customer experience, businesses can drive top-line growth.
Organisations that have undergone a digital transformation have seen, on average, a 19% increase in annual revenue growth according to McKinsey & Company. A study by Boston Consulting Group showed that companies who have digitised are also 26% more profitable than their peers.

  • By improving customer experience and creating new efficiencies, digital transformation can help increase revenue.
  • Digital transformation can help businesses tap into new markets and better serve their existing customers. By leveraging technology, businesses can expand their reach and connect with more potential customers than ever before. Additionally, digital channels can be used to cultivate relationships with customers and build loyalty.
  • Digital transformation and data can help businesses in a number of ways:
    • First, digitisation can open up new markets and customer segments that were previously unreachable.
    • Additionally, data can provide insights into customer behaviour, preferences, and needs. This information can then be used to create targeted marketing campaigns that are more likely to result in conversions.
    • Finally, digital transformation can help businesses automate processes and reduce costs, which frees up more resources to be reinvested into revenue-generating activities.

How to measure digital transformation KPIs

A company’s digital transformation can be a major undertaking, and it’s important to set and track the right KPIs to ensure success. Here’s how to measure digital transformation KPIs:

  • Define your goals. What are you trying to achieve with your digital transformation? Once you know this, you can select the KPIs that will help you track progress towards your goals.
  • Select KPIs that align with your goals. There are many possible KPIs for digital transformation, but not all of them will be relevant to your specific goals. Choose KPIs that will give you the most insights into whether or not you’re on track.
  • Track progress over time. Monitoring your KPIs over time will give you a clear picture of whether or not your digital transformation is progressing as planned.


In conclusion, it is important to measure progress with digital transformation KPIs in order to ensure that the transformation is on track. By tracking these KPIs, organisations can make necessary adjustments to ensure that the transformation is successful.

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