Businesses can easily lose sight of objectives in the ever-changing, ever-evolving process of digital transformation. Distributors must look to digital transformation in order to improve their business productivity, profitability and customer engagement by streamlining business processes.
Less than 15% of companies can quantify the impact of their digital initiatives. So, it is vital for distributors to track the success or failure of their transformation strategies. There is no question that technology is changing the way we do business. To measure the success or failure of these transformations, businesses must carefully examine success metrics based on the technological investment and ultimately the business objectives. Here are benchmarks to look at:
Sales Boost. We all know at the end of the day it is about the bottom line. Distributors can simply look to quantify the value of their digital transformation projects by evaluating sales pre and post transformation. A simple year-over-year comparison will indicate the positive or negative impact the digital transformation has made on revenue.
Employee productivity. New technology should help support the day to day tasks of employees to facilitate their roles in the business. In doing so, employees can focus their time on higher priority and more profitable tasks such as upselling. This productivity measure can be as simple as dividing total revenue by total employees. The information can help you determine the impact of hiring or losing an employee, but doesn’t account for the digital transformation investment. That could be established by determining which employees interact with the system and looking at the change in revenue assigned to those employees over time.
Customer experience. Digital transformation projects should be noticed by customers through an improved experience and an increase in satisfaction. Monitoring these metrics as well as the increase in new customers and customer loyalty can indicate if your digital transformations are meeting your business objectives and customer expectations.
ROI. This may be an obvious defining factor of implementing a digital transformation, but one that can be easily overlooked. Distributors need to focus on investing in technology that will generate the largest and fastest ROI. Ensuring these transformations are not only reducing operational costs, but also covering the original investment in a timely manner is critical when determining the right digitization to pursue.
In the world of B2B, distributors and manufacturers are increasingly being forced to provide personalized, customer-centric experiences to remain competitive. It is important to remember the original objectives of digital transformation and consider how the business intends to track the transformation’s success. Metrics will not only define the success or failure, but will highlight where adjustments need to be made in order to maximize the efficiency of digital transformation.