How to Measure ROI in Digital Transformation & Drive Company Success

What is Digital Transformation and the Role of the Customer?

With the dynamic shift in business requirements and customer expectations, digital transformation is a response mechanism that allows businesses to transform their business processes, cultures, hierarchical structures, and customer experiences by harnessing the power of technology to satisfy the shift in demands. Operations are modified to boost performance and replace repetitive work with meaningful tasks while reducing the number of human errors. 

The digital era has produced a climate in which new technologies and rivals are challenging sectors with distinct business strategies. Companies must change in this circumstance or risk being left behind. Businesses benefit from digital transformation by increasing the efficiency of their operations and allowing large-scale automation. 

According to PWC Pulse, “60% of CEOs believe digital transformation will be their most important growth driver in 2022.” Customers in this ever-changing environment are also changing, resulting in the need to use technology to track customer expectations. 

What Are the Digital Transformation Benefits for Organizations?

In today’s digital environment, businesses must adapt in order to provide new goods, attract new consumers, and expand into new market sectors. A large number of businesses have thrived as a result of digital transformation. It includes all parts of an organization, from day-to-day interactions between personnel to complicated technology, tools, and procedures, such as managing CRM systems through new integrated sales tools like Salesforce, HubSpot, and Zoho. According to Forbes, the top benefits of digital transformation, according to executives, are greater operational efficiency (40%), faster time to market (36%), and the capacity to satisfy consumer expectations (35%).

In the article “Research on the Relationship between Digital Transformation and Performance of Small Medium Enterprises,” the author answers, “what are the digital transformation benefits for organizations?”  Digital transformation has a beneficial influence on the dynamic capacities of organizations; the more prone the existing task force is to errors, the bigger the positive impact digital transformation has on firms’ dynamic capabilities and innovative performance. 

Be Agile And Quick to Deliver Solutions Fast

According to Mckinsey’s research, organizations undergoing the digital transformation phase work faster, from assessing plans to assigning resources. They reallocate personnel and money five times faster than their peers, showcasing flexibility in response to the dynamic business environment.

Businesses must be able to detect new dangers and opportunities early on while bringing items to market faster than the competition, which is critical for staying ahead. Businesses may boost their agility with digital transformation to improve speed-to-market and implement Continuous Improvement (CI) techniques by borrowing from the field of software development. This enables quicker invention and adaptability while also providing a route to progress.

Measuring ROI of Digital Transformation

Many business leaders question how the impact of digital transformation can be quantified. In other words, how can the ROI of digital transformation be measured?

Measuring ROI for any company is highly subjective to the company’s goals. Forbes describes a way for companies to measure the ROI of digital transformation with the following key steps:

• Decide the main motivation behind digitally transforming
• Decide on the metrics that could help holistically aid the motivation
• Prepare for unexpected impacts

Spearheaded Growth: Revenues, Profits, and Lower Costs

Digital technology may help a firm improve its income by allowing it to access new markets and consumers. Businesses might, for example, employ big data analytics to uncover new market possibilities and possible customer categories. They may also design focused marketing initiatives using data-driven marketing strategies such as predictive analytics using ML models on Python or careful visualizations on Power BI. Furthermore, organizations seek to minimize costs by utilizing cutting-edge digital solutions that enable the automation of corporate processes by leveraging technology such as Robotic Process Automation (RPA), smart objects, and the Internet of Things (loT). Automation lowers human mistakes and results in more cost-effective processes.

Companies that go through digital transformation increase their productivity and profitability. Organizational reforms and technology deployments are both paying off for digital transformation leaders in ways that are currently producing value and will do so in the long run. Take a look at the following findings from the SAP Center for Business Insights and Oxford Economics:

• Profits have grown in 80% of firms that have completed the digital transformation.
• Over the next two years, executives estimate 23% more revenue growth from digital transformation than from investing elsewhere.

Enhanced Customer Experience

BigData analytics and Artificial Intelligence (Al) enable businesses to customize the customer experience in ways that increase customer happiness. Simultaneously, the usage of mobile devices enables businesses to provide customized offers depending on their consumers’ interests or locations. Furthermore, companies may deploy AI-powered bots and personal assistants to deliver personalized customer support and aid customers in finding the items they need. 

Concrete Decisions Based on Data-Driven Insights

Digital transformations enable businesses to collect and use massive volumes of data for better decision-making. As a result, they assist companies in making the transition from heuristic judgments to informed, evidence-based, data-driven, and generally more effective decision-making. Businesses may utilize the following benefits with the use of analytics to expand on the question of what digital transformation and the role of the customer are:

• Improved access to structured data
• Reduced staff burden
• More trustworthy data
• More data sources
• Decision-making based on information

Data is the fuel that powers smarter and quicker choices. According to a McKinsey analysis, high-performing firms are three times more likely than others to claim that their data and analytics projects contributed at least 20% to profits before interest and tax (EBIT) between 2016 and 2019.

In summary, some of the most important advantages of digital transformation for your organization are:

• Enhanced operational effectiveness
• A significant reduction in human mistakes
• Secure data storage (cloud solutions)
• A reduction in operational expenses
• Data openness across the organization
• Large-scale data analysis is now possible

Infinit-O partners with the world’s fastest-growing Technology, Financial, and Healthcare services companies who want to scale more effectively and advance their brands, providing a strategic advantage. 

Demonstrated by our world-class Net Promoter Score of 71, we deliver the highest quality outsourcing services using our unique data-driven approach – combining powerful technology and high-performance teams within our highly-engaged and agile culture. 

Our expertise includes Customer Experience, Back Office, Sales, Data Science, and Engineering. Explore the benefits of digital transformation on our website.