Measuring ROI On Digital Transformation

The capacity to determine digital transformation’s return on investment (ROI) might be difficult for transformation businesses. Because client interactions cannot be quantified using traditional methods, no single statistic can be used to assess digital transformation. They must notice and consider the advances in customer service, business processes, and workflow.

With an expectation of increased revenue and new value creation, it’s difficult for them to avoid confusion. Return on Investment (ROI) determines the effectiveness of a company’s investment. Companies can evaluate the return on a specific investment based on ROI compared to the investment. So, how should organizations measure ROI, and, more importantly, how should they define and achieve the appropriate ROI goals?

Let’s explore the strategic guidelines and steps mentioned below:


Guidelines To Follow

The technology implementation improves or builds a process, product, or expertise to deliver commercial value, revenue growth, improved customer experience, cost reduction, and increased productivity. In the end, for-profit businesses strive to increase their revenues, while non-profit organizations want to improve their efficiency. The goal is to improve customer interactions through technology such as artificial intelligence, analytics, and self-service, resulting in a return on investment that Businesses may quantify in various ways.

Calculation Process of ROI On Digital Transformation

Some corporate businesses demand that a digital transformation project be up and operating as soon as possible, citing competitors with digital transformation roadmaps in place. However, revolutionary steps like improving customer service or increasing efficiency with new technology necessitate thorough preparation.

Digital Transformation Metrics

Businesses seek to approach digital transformation in a more appealing and disruptive manner. They can use all of the following metrics to assess the change:

  • Increased Sales
  • Increased Client Acquisition, Retention, and Satisfaction
  • Enhancement of process quality
  • Enhancement of product quality
  • Improved Productivity.

Customer Experience

Digital transformation can affect every element of an organization, but it has the most significant impact on customer experience. With advancements in technology, customer experience has become the top priority for organizations that thrive on digital platforms for direct customer-brand communications. It’s critical to note the advantages of implementing new technology to improve customer experience. Track technical advancements that enhance customer experience and use the most suitable digital marketing trends to improve customer experience. The long-term benefit of your digital transformation activities is more important than short-term revenue. Business processes that directly affect customers can also impact brand value. Good data security policies can instill trust in customers if companies track the record of conserving and safeguarding their customers’ personal information.

Digitalization Capacity

According to analysis, seven key capabilities drive digital transformation, including intelligent processes, business model adaptability, and a unified customer experience. It’s also critical to create a business ecosystem that relies on partnerships with external companies to provide cutting-edge technology and harness their skills and resources to promote digital transformation. Intelligent workflows enable you to make the most of your technology implementations and human resources, which help create an environment that allows for the best possible business outcomes. A unified customer experience aims to provide the most efficient services while also seamlessly delivering products and services.

Innovation Returns

When it comes to gauging digital transformation, digital innovation initiatives are more critical than investment. A product or service that offers anything new defines innovation at its most fundamental level. This could be a brand-new digital product or an existing product with a digital twist to improve the consumer experience. Investments made in small increments are more likely to result in reduced returns. Instead, companies must spend more on innovation and stay up-to-date with the latest technological advances to succeed in the digital world.

Determine ROI Affecting Factors

If you have a well-established product, measuring the ROI of digital transformation is simple. If you’re launching a new innovative product, concentrate on finding consumer satisfaction patterns and positive changes in your product or service quality. The ROI on digital transformation is constant for established organizations. However, when new technology is incorporated into a company, the likelihood of digital growth is significant. Marketing timing is crucial for new products, leading to a long-term and elastic ROI. It’s critical to acquire a head start on your competitors when launching a new product or service. Focusing on your market value, total revenue, and year-over-year growth figures for your digital transformation roadmap is the most effective approach to determine the ROI for your digital innovation activities.

Steps To Follow

Set Goals.

Businesses should concentrate on a digital transformation goal for an estimated time, prioritizing which will benefit the company. The determination of a single aim aids firms in developing precise plans and implementing successful actions while maximizing the company’s existing resources. Businesses can choose the appropriate ROI target based on the digital transformation goal and use route optimization software to boost fleet productivity.

Structure Business Cost

The next step is for businesses to evaluate their current cost structure:

  • Finding the most cost-effective activities
  • Finding non-cost-effective activities
  • Finding activities to invest more and vice versa
  • Finding changes to make in the existing cost structure in line with your digital transformation goals

The good idea is to invest in Business management software to minimize human efforts and time consumption. Although it seems to be a costly investment in terms of software subscription plus users training, it will increase productivity and save time and effort. Hence, businesses must invest to save time and adapt to tech advancements and innovations’ current cost structure trends.

Adjust Strategy

Businesses find it challenging to determine whether the digital transformation is effective or not by examining ROI outcomes over a short period without comparing them to other periods. But with this approach, they cannot expect satisfying quick results as digital transformation is a lengthy and patient-seeking process. Measure ROI regularly according to predetermined timescales to establish the success of your digital transformation. Monitoring ROI regularly in established timelines assists in evaluating the performance will help assess the effectiveness of the existing operation method in achieving the initial purpose and making necessary changes.


It’s critical to understand the company’s context when considering an investment in digital transformation. For a micro-level digital transformation investment, promotions and demonstrations of the offerings to your potential target audience are recommended. The importance of ROI in digital transformation cannot be overstated. A high return on investment (ROI) indicates that the company’s investment strategy is clear and on track. However, businesses must combine analysis and comparison with other indicators to have a holistic view of the business and make the best decisions.


Leave a Comment