Complete Guide to Digital Transformation KPIs for Businesses

Digital transformation has become a priority for businesses worldwide. Sometimes also referred to as digitization, digital transformation is the integration of digital technology in the workplace to enhance productivity, increase operational efficiency, and lower costs.

The Complete Guide to Digital Transformation KPIs for Businesses

Digital transformation has become a priority for businesses worldwide. Sometimes also referred to as digitization, digital transformation is the integration of digital technology in the workplace to enhance productivity, increase operational efficiency, and lower costs.

Digitization is the most sustainable means of commercial success in a connected world. Global digital transformation spending is projected to reach 2.8 trillion U.S. dollars by 2025, and that figure is only going to increase. According to a global survey conducted by IFS, 70 percent of businesses plan to increase or maintain their spending on digital transformation initiatives.

As companies across sectors begin to develop and implement these digital solutions, CIOs and CTOs need to be able to demonstrate the tangible business impact of these tech investments to internal stakeholders. The most effective way to track the success of your digital transformation is by setting realistic KPIs that can be measured and adapted over time.

Digital Transformation

How to Set Realistic Digital Transformation KPIs for Your Business

To achieve the expected business outcomes from your digital initiatives, you need to choose the right metrics. It’s not rocket science, but many businesses still struggle to establish good digital transformation metrics. The reason is the lack of clear communication between top-level company executives, and IT teams tasked with implementing digital solutions.

Understanding People, Process, and Technology 

For an organization to achieve digital transformation, there must be three components of a business working together, i.e., People, Process, and Technology. The IT department must have a proper understanding of the challenges people are facing, the current processes, and where improvement is needed before making any technology decisions.

When an organization understands the people and processes, the IT department can identify the proper technology to implement. Follow these steps to avoid any understanding gaps when implementing digital transformation initiatives in your organization:

  1. Schedule an initial meeting with the stakeholders to identify the scope, goals, and expected results. The purpose of this meeting is to identify the processes and the team that will be involved with developing and implementing the ultimate solution identified.
  2. Group meeting. Have a group meeting with the teams that will be using the technology to identify the project goals, expectations, and constraints of the project team.
  3. The interviews. This is where you take a deep dive into issues, problems, and opportunities with the individuals critical to the project. This is users, executives, and vendors.
  4. Internal review and analysis, putting all the notes together and crafting the plan for the organization.
  5. The final meeting is to confirm that you have all your ducks in a row and ensure that you have the next steps.

Following these steps to the letter will help you come up with a Vision Statement to get the team aligned, then a project timeline with steps that need to be taken, and finally, the project execution plan.

More importantly, this process will help you set the right benchmarks to assess digital transformation success. You will be able to understand the KPIs that need to be measured to know what would be considered a success for the digital transformation.

Key Digital Transformation KPIs

KPIs, short for Key performance indicators, are a set of measurements organizations use to quantify progress towards important business objectives. Companies need pre-determined KPIs to track whether or not the digital transformation process is creating the intended value.

While there are no rules on how businesses should measure the success of their digital initiatives, it’s imperative that you choose realistic KPIs that are tailored to your individual business needs and goals. Having the right KPI’s will allow you to navigate and make the necessary changes based on these metrics to keep you on the right path.

You can’t rush into these digital uncharted waters without a navigation plan that steers you around rough weather. So, what are the most important KPIs for measuring the progress of your digital transformation?

User Experience

User experience is the most important KPI to track when going through a digital transformation. This metric allows you to track how well the users are navigating any new processes implemented, how well they are performing, and if they are living up to expectations.

Closely tracking user experience and getting feedback is the best way to see how well users are adapting to the new methods. It also allows you to make adjustments as needed in order to make the digital transformation successful.

For example, when I’m developing and writing new software, I make sure I get the input of the end-user as well as management to make the product a success. This way, when the new system is deployed, the users are already familiar with the system and processes.


Productivity is another important metric for measuring operational efficiency. It is a measure of the efficiency of an employee completing a task. Productivity is calculated based on the amount of output on a project versus the amount of time it takes. By tracking productivity, you can measure the efficiency of your digital transformation process.

Digital tools allow businesses to do more with less. The amount of work done by employees is expected to increase after a successful digital transformation. For instance, a digital initiative that automates basic tasks allows employees to focus on tasks that are more productive. As a result, your business will generate higher revenue or profit per employee with time.

You can use revenue per employee to track the impact of your digital initiatives and sum up which direction the digital transformation is going.

Without key metrics to track progress, your digital initiatives can quickly unravel and fail to reach their full potential. The right KPIs will help you get a clearer picture of your digital transformation ROI.

What Is Digital Transformations ROI?

Digital transformation ROI (Return on Investment) is the continuous measurement of the project’s value. The benefits of the digital tools integrated into your business must outweigh the cost of resource use, such as time and investment spent.

How do you calculate the ROI of digital transformation? To measure the ROI of your digital transformation, track how the technologies you include in your business process improve your strategy goals, whether it’s better customer experience or lower costs.

The goal of any digital transformation is to have a significant enough return on investment (ROI) in order to implement these changes.

How to Calculate Digital Transformation ROI

Calculating the ROI of a technology investment starts with the following formula: ROI = net gain/cost. All digital transformation projects should have an ROI. If the implementation process takes into account people, process, and technology properly, then there is typically a very good chance for an ROI.

How Digital Transformation Can Impact a Business

A digital transformation can affect all aspects of an organization. Most businesses are embarking on a digital transformation, hoping that it will lead to:

  • Reduction of costs
  • Increased productivity
  • Business growth

Work these goals into the overall digital transformation plan and track them using KPIs to make sure that your plan is on target. That being said, a digital transformation could affect various organizations in different ways.

It all depends on what you are trying to achieve with digital transformation. For instance, an organization focused on faster automation can measure how much time is spent on otherwise manual work.

Track the Progress of Your Digital Initiatives

Regardless of what you are trying to achieve with your digital initiatives, it’s important to track the progress of your transformation. To improve and see growth, you need to measure. And as far as digital transformation is concerned, one must measure the following to assure success:

  • Active users involved
  • Costs to implement the initiatives
  • User engagement and participation level
  • The number of processes affected
  • Employee Productivity improvement

These metrics necessitate calculating ROI from tech-driven changes in operation and their impact on your bottom line. Once you measure the KPI’s, you will be able to see the return on investment of your digital transformation.

Wrapping Up

More and more organizations are prioritizing digital transformation, leveraging technology to improve various aspects of their business. When these digital initiatives go according to plan, the business stands to gain a competitive advantage that will catapult it towards sustained success in the future.

To do this successfully, you need a set of metrics, such as a digital transformation KPIs list, to track the success of their digital transformation. These metrics will help IT leaders demonstrate the tangible business impact of various tech investments to internal stakeholders. Identifying the correct KPIs to measure the success of your digital transformation can be a massive challenge.

Regardless of what KPIs you use to measure the progress of your digital transformation, all metrics require ongoing evaluation and adjustments as needed for an organization to achieve the desired outcome. Because many organizations lack the expertise to effectively track their digital transformation initiatives, these projects often fall short of their objectives.

Realized Solutions can provide you with the tools you need to measure your digital transformation’s progress and help you digitize existing processes. Our professionals have years of experience in planning and executing digital transformation strategies for all types of businesses. Contact us today to learn how we can help you improve your KPIs and boost digital transformation success.

Thanks to our colleagues at Velocity IT in Dallas for their help with this content.