The challenge of ROI in digital transformation processes

The world is currently undergoing a transformation that has one of its main causes in new technologies. The impact that Big Data, AI or Cloud Computing have had on the business world has made digital transformation more than a trend, a necessity.

Why are ongoing digitalization processes so important and how do they relate to the investment returns of companies? Let’s see.

 

Digital transformation: fashion or necessity?

According to IDC figures, by 2021 the European GDP will be digitized by at least 40%, which indicates that by that date the income generated by the companies will obey in an important part the implementation of processes of digitalization based on massive data management and information.

Hence, 55% of European companies now consider digitalization as a strategic objective , and that they have already developed some digital initiative or service, although still devoid of the disruptive nature.

On the other hand, cost reduction as a product of digital process optimization could reach 20% in operational processes such as production, inventory, quality, maintenance and logistics, as indicated by a study by Roland Berger.

This study also indicates that by 2025, digitalization will result in an increase of 120,000 million over gross value added.

 

Digital transformation and ROI: how to address it?

Experts such as José Antonio Cano, IDC executive consultant, have affirmed the complexity of measuring the return on investment of digital conversion processes , even if success stories are already verified.

However, a key to deducing the profitability of the digital implementation in business models is in the correct definition of KPIs, metrics that can indicate if the expected investment returns are achieved in indicators such as conversion rates or customer satisfaction .

Assuming digitalization translates into a significant improvement of business processes , which allows converting large amounts of data into added value for customers, which implies the optimization of products and services, as well as the efficiency of marketing campaigns.

 

Digitization and return on investment

Data from the CEO Outlook 2019 report indicate that digitalization is already a reality in the daily life of organizations. Likewise, 62% of CEOs interviewed said that digital conversion is their strategic priority.

Now, to obtain a positive return on this transformation, the approach may not have to be put into the return on investment, but rather on the idea of ​​being between two options: adapting to the digital world or disappearing. That is, we should not focus so much on the ROI that we will achieve with these actions, but on the adaptation of our company to the current market, as well as on the improvement of business processes that will entail the digitalization of it.

In conclusion, the ROI of digitalization can be better measured, rather than in a KPI, by the benefits it brings in terms of efficiency and agility.

Is your company in a process of digital transformation? Contact us and we will see how we can help you maximize the results.

 

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