This year, digital transformation solutions are leading the way for business innovation in the B2B distribution and manufacturing market. Transformations are improving efficiency, increasing customer satisfaction, and ultimately increasing profitability. With the implementation of these projects, there is a need to consider all variables that come into play with digitization. In doing so, it’s easy to lose sight of the initial business objectives and strategies. With this in mind, how is the success or failure of a digital transformation being measured?
As more B2B businesses continue to invest in digital solutions, it has become evident that less than 15 percent of companies can accurately calculate the impact or success of their digital transformation projects. Measuring the success or failure of any digital transformation can be a challenging task due to complex data and an abundance of information. Creating clear and concise objectives for such a transformation is important to ensure the program maximizes on the original investment. The success of digital transformation projects can be simplified by using analytics and data depending on business objectives, and here are four key metrics to consider:
Boost in Profits
With any business change or implementation, the bottom line tells all. Distributors and manufacturers can look at a simple year-to-year analysis to effectively evaluate the success or failure of a digital transformation. This comparison will highlight the key changes throughout the transformation process — from initial development to post modifications. Considering the bottom line and overall profits will guarantee the digital transformation is not only boosting profit but also proving to be a sound business investment. For example, distributors and manufacturers can gain profits from implementing digital transformations to help convert new customers. This can be evaluated by how many new conversions have been made since the transformation, exposing the true profitability of the investment.
Digital transformation projects that offer improved productivity and customer satisfaction are equally important and valuable. For decision-makers, tackling these projects that can guarantee an improvement in productivity and business efficiency should remain top of mind. For instance, implementing technology such as purchase order automation can enable staff to focus on more value-added tasks like upselling customers or maintaining customer relationships instead of manually entering orders. Implementing order automation software can save up to 95 percent of a customer service representative’s time by lowering the possibility for errors. It can also result in faster order cycle times, which can prevent the need for overtime hours during busy periods, further helping to increase profitability.
Digital transformation technologies can offer solutions to companies in a number of ways, but what can easily be overlooked in the hype of new technology is its impact on employees. Digital transformation is a business-wide effort, one that will affect multiple roles at various levels of the company. Understanding and considering solutions that are not only going to improve the customer experience but also support employees to thrive in their roles can be equally vital for success. Employees are a business’s foundation, and ensuring that tasks such as administrative functions are streamlined will secure an increase in customer service and employee satisfaction.
Customer satisfaction and retention is another factor that can be evaluated. Establishing a primary objective for customer satisfaction will enable further evaluation. Understanding an impact to scores prior to the implementation as well as after any transformation can be achieved by collecting and collating customer data. Monitoring data such as customer audit lists can be a simple means to discover how many customers are remaining loyal and how many new customers have been added since the transformation. In addition to an audit list, surveys can also help track customer loyalty or retention.
Consider the ROI
Enthusiasm for digital transformation technologies can sometimes overshadow its goals. The key to success is understanding how quickly a project will deliver a return on investment (ROI). Calculating the initial costs and how quickly the business has to recoup the investment will offer more confidence that the transformation is a sound financial decision. The most drastic transformations do not necessarily equate to the best ROI. Distributors should consider taking small steps toward larger digital transformation projects in order to safely navigate through the abundance of available technologies.
Effectively measuring the success or failure of any digital transformation project is vital to business growth and success. While it can be easy to lose sight of business goals in the wake of a changing digital B2B landscape, focusing on transformations that support strategic business plans will ensure accurate and effective business improvements. Implementing digital transformations into any business process will cause a disruption throughout the company; however, taking the time to evaluate the outcomes can reassure decision-makers they’re making an appropriate business investment. Calculating the success of digital projects while offering support to the team will guarantee a smooth transition through any business transformation as we continue to see an evolving B2B landscape.
Publication date: 11/20/18