Sunday, May 21, 2017

The Monthly Performance Insight: How to Measure Return on Digital Transformation May 2017

Corporate Performance Management is a management control from strategy till shop floor. "If you can't measure, you can't manage," legendary management guru Peter Drucker once asserted. He was right Managing performance means understanding results, setting metrics, fixing plans, and making decisions to ensure it happens. It takes multifaceted approaches from multidimensional perspectives.


  How to Measure Return on Digital Transformation

How to Set Performance Indicators to Measure Return on Digital Transformation? Change is inevitable, and the speed of change is increasing. The digital transformation is now spreading rapidly to enable organizations of all shapes and sizes to reinvent themselves, but it is the thorny journey with many bumps and curves on the way. How do you measure return on digital transformation in order to make the timely adjustment and improve its success rate? A well-defined set of measurement for digital transformation should contain a good mix of outcome measures or the long-term strategic value along with performance drivers to track the progress in the short term (operational measures).?

From Performance Appraisals to Performance Optimization Managing performance is a wonderful idea! But too many companies ignore the difference between doing PA (Performance Appraisal) and actually being proactive in performance management. In fact, in performance management, much less time should be spent on evaluating past performance, but moving to removing barriers to future performance. You can ask yourself some questions to move in the right direction like how frequent feedback will add value to your organization and the employees, what are the organizational goals and what value can performance evaluation add to it? What rewards should be linked to performance evaluation and how these rewards will affect the productivity of your employees and contribute to the organizational goals?

Strategic KPIs vs. Operational KPIs KPIs are indicators to identify if the adopted strategy, operation, and process, etc is working toward the objective. As such, you don't "adopt" a KPI to "achieve an outcome," you adopt a strategy or operational workflow to achieve the outcome, and you define KPIs to monitor the progress and performance. That’s the name KPI –Key Performance Indicators stand for. The provocative question is: is it possible to link operational KPI's to strategic ones to reflect and track the overall progress in achieving the strategic goals?

How to Develop the Performance Measures for Strategy? The strategy will start being more and more dynamic so the consistency and "perennial" guide of the organization will be better represented by company’s identity. Leadership, strategy, and management will build, develop and make that proposed (desired) identity. Going further, the metrics should also be immersed in a sustainable development way of thinking. However, what’s systematic thinking and which approach should you apply to develop the performance measures for your strategy?

Monitor the Digital Pulse of Organizations The multidimensional digital transformation provides impressive advantages in terms of the speed of delivering solutions and ability to adapt to changes. The effects of an increasingly digitalized world are now reaching into every corner of businesses and every aspect of organizations. Digital businesses nowadays are fast, always “on,” highly connected, interdependent, and ultra-competitive. Digital transformation is not a one-time project or a stand-alone initiative; it is a continuous journey to adapt to the new normal of the business world. As the business executive, how can you monitor the digital pulse of your company in order to lead changes steadfastly and manage the business effectively?

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