![]() “Domain” here refers to a critical process, customer or employee journey, or function. To maximize returns, we recommend transforming one business domain at a time and broadening from there for traction and coherence. Thus, digital investment is also about loss avoidance. Keep in mind that there’s no such thing as standing still to make little or no investment relative to the competition is to fall further behind. CEOs should look not only at the value being provided by individual priority digital initiatives but also at initiatives’ collective support of strategic organizational goals. ![]() Measuring the return on digital investment is both standard and essential. CEOs should monitor five broad markers to assess the organization’s digital progress accurately (Exhibit 1). Given the scale and complexity of digital transformation, measurement is critical to ensure that all the expense and effort of digital investment are paying off with improved performance. When implementation of the prioritized digital road map has begun, it is time to start measuring performance. However, doing so runs the risk that none will achieve enough scale to change behavior, mobilize the broader organization, or drive material impact. ![]() Perhaps the most common pitfall we see in failed digital strategies is the tendency for leaders to greenlight every project. It’s to force the organization to prioritize three to five bold initiatives, meaning digital moves that have potential to make a material difference in the organization’s overall performance, and to focus resources accordingly. CEOs should ask themselves today, “Does my organization have a clear road map of digital priorities, rather than a basket of digital projects?” The purpose of this road map is not just to get from point A to point B. Prioritizing digital initiatives is an essential first step we’ve written about frequently, but it’s worth repeating-and it falls directly on the CEO’s shoulders. The cross-organizational metrics we describe offer CEOs a holistic view of strides made toward company-wide digital transformation. CEOs are uniquely positioned to have full view-and influence-across business functions and regions to ensure that the organization as a whole is leveraging digital in a meaningful and profitable way. However, the move to digital is a horizontal one, spanning the entire organization. Such metrics are important inputs for CEOs monitoring digital progress. Tracking the percentage of sales that are digital, for example, often falls to the head of sales. There are, of course, some digital metrics that business leaders appropriately capture at the functional level. It’s this last activity that this article will detail, along with ways CEOs can ensure that metrics are moving in the right direction.Īt first glance, CEOs might think that monitoring and driving these metrics falls to functional leaders. That means prioritizing scalable initiatives capable of substantially improving the organization’s performance insisting on fast, minimally viable outcomes that can be improved over time and, importantly, measuring and tracking the impact and value creation of all digital initiatives. Organizations pursuing digitization need a fully engaged CEO to take charge and drive actual performance gains from digital investment. While business and technology leaders might report good progress on those initiatives to the CEO, simply getting projects off the drawing board doesn’t guarantee that the organization is increasing revenue, profitability, market share, efficiency, or competitive moats as a result. But when we ask them to quantify the impact on the bottom line, there’s usually a long silence. When we ask CEOs how their transition to digital is progressing, they often respond with a list of initiatives under way across the business-building a new tech platform, launching new products, or investing in infrastructure, to name a few. The link to business value, however, is not. ![]() In a time of seemingly nonstop digital disruptions, which have only accelerated during the COVID-19 pandemic, the business imperative to embrace digital, data, and analytics is widely understood.
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