Calibrate digital KPIs to accelerate and build digital momentum
Nowadays, as we see more complexity being added to our business, we strive for alignment, the orchestration of processes and measurement of cross-functional and hybrid working teams.
The main reason why almost all enterprises are investing in digitization is the need to integrate and improve their existing businesses and to innovate by adding new sources of revenue and value to their customers.
How can we execute digital strategies better?
Establishing clear digital KPIs aligned to business outcomes is key for executing strategies, allocating team efforts, and prioritizing investments. Plus, according to Gartner, “maintaining progress during extended business challenges requires executive leaders to recalibrate KPIs and their efforts, especially if the goal is to accelerate.
“As the pursuit of digital business is more of a journey than a destination, executive leaders should expect some KPIs that they set up will be transitional measures. Good KPIs help enable an organization to make data and metrics-driven prioritizations and decisions.”
Focus on business outcomes from digital business investments
How to create meaningful digital KPIs?
The value of a KPI is to support any decision an organization has to make.
As per Gartner ” KPIs are there to make it easier to align priorities, investments and allocations with expected outcomes and should be kept current. Some KPIs are permanent, and some are transitional, used to measure specific initiatives.”
Gartner recommends that all digital KPIs have five essential elements:
- What is being measured?
- Where are we today?
- What is our target goal?
- What is our desired business outcome or benefit?
- What is our balance point?
Digital KPIs best practice tips
“These metrics should be consistently adapted over time so that you reflect the goals of the business and the investments in digital and to support the prioritization for the future. While you don’t want to get in the habit of just changing your KPIs when times get tough, or the business environment changes.”
Gartner’s recommendation is to make sure that: “your existing KPIs are helping you to make better business decisions. As conditions, objectives or desired outcomes shift, you should ask yourself, ‘How should our KPIs change?’”
“Understanding the current state and tracking the progress to a specific goal provides the transparency that is the first step in acceleration. But if your goal was to accelerate progress, make sure that KPIs are constructed to measure the rate of change over a specified time period. Once an organization has made progress, and is starting to accelerate the pace of change, it often shifts its focus to maintaining momentum. If this is where you have placed focus, measure progress at the outset, and track progress at scale,” says Gartner.
Can we really measure progress and results with key performance indicators? Yes, we firmly believe we can. We also believe that the process for doing so is essential. Creating a good framework keeps the entire organization working together, in the same direction and towards the same objectives. At Pitcher, we also believe in clear collaboration metrics and deliverables.
However, there are some challenges in setting and analyzing KPIs.
While metrics are interpreted by people, and people’s actions result from their previous experiences, KPIs are not always automatically fed back into the control cycle of managing a company. This is why simplifications are necessary to make them usable. Using the right tools within your organization can really help to streamline processes, gather data, and compare and innovate where possible.
At Pitcher, we focus on revenue teams. We make it possible to track and analyze a large portion of these processes and their performance over time: workflows, teams, inventory systems, field execution and remote engagement.
In the Garter study, you will find some useful examples of digital progress-oriented KPIs for your review that will help you to ensure that your KPIs are well-articulated. By defining the right KPIs and maintaining a clear focus on business outcomes, you will enable digital business acceleration and open the way for new business models.
Gartner, Calibrate Digital KPIs to Accelerate and Build Digital Business Momentum, Stephen Smith, Paul Proctor, James Anderson, Rui Zhang, Apoorva Chhabra, 12 April 2021
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FAQs
How can we execute digital strategies better?
Establishing clear digital KPIs aligned to business outcomes is key for executing strategies, allocating team efforts, and prioritizing investments. Plus, according to Gartner, “maintaining progress during extended business challenges requires executive leaders to recalibrate KPIs and their efforts, especially if the goal is to accelerate.
How to create meaningful digital KPIs?
The value of a KPI is to support any decision an organization has to make.
As per Gartner ” KPIs are there to make it easier to align priorities, investments and allocations with expected outcomes and should be kept current. Some KPIs are permanent, and some are transitional, used to measure specific initiatives.”
Gartner recommends that all digital KPIs have five essential elements:
- What is being measured?
- Where are we today?
- What is our target goal?
- What is our desired business outcome or benefit?
- What is our balance point?
Digital KPIs best practice tips
“These metrics should be consistently adapted over time so that you reflect the goals of the business and the investments in digital and to support the prioritization for the future. While you don’t want to get in the habit of just changing your KPIs when times get tough, or the business environment changes.”
Gartner’s recommendation is to make sure that: “your existing KPIs are helping you to make better business decisions. As conditions, objectives or desired outcomes shift, you should ask yourself, ‘How should our KPIs change?’”