Depending on where your organization is in its technology journey, a trending digital technology investment, such as machine learning (ML), Internet of things (IoT), robotics or even artificial intelligence (AI) solutions, may be in the cards. Either way, now is a perfect time to ask a critical question:
How good is your company at definitively demonstrating the connections between specific actions and desired results versus actual outcomes?
If you answered “not very” or you aren’t sure, you’re definitely not alone. Based on our experience, 75% of companies struggle with this. That means decision makers are frequently in the dark about the actual value of key decisions. And when you consider the costs of a new digital technology investment, along with the time and effort associated with implementation and training, this lack of clear insights is problematic to say the least.
Do you know where you should apply your next technology investment? The answer lies within your KPIs….That is if you have the right KPI management approach in place.
One of the big challenges with any new technology investment is figuring out if it will truly help grow revenue or profits or free up working capital and if the gains will justify the costs. But in the absence of a crystal ball, how can you answer this question?
The short answer is through a phased approach in one area or process that uses key performance indicators (KPIs) to understand the impact of a technology vis-à-vis a specific business goal. Moreover, if you aren’t currently able to accurately track and quickly react to KPIs, any investment in more advanced technologies is premature.
Establishing an effective KPI management strategy before jumping into more advanced digital technologies is important because a good KPI Management software enables executives and managers to:
The third bullet is especially important in the case of selecting new technology because it speaks to your ability to choose solutions based on the most pressing business needs versus based on what’s being hyped in the marketplace. In other words, if you’re seeing lots of quality issues, predictive technologies could be a good investment. Or you could pinpoint areas of the business where using robotics or another form of digitization makes the most sense for controlling costs.
Of course, KPI management isn’t foolproof, so your approach matters and there are several layers of challenges, including:
The easier it is for your business to track and manage KPIs, the better. Spreadsheets no longer cut it because they make it so cumbersome and time consuming to track what’s happening (not to mention the errors and issues associated with manual data entry).
Dploy Solutions KPI Management software provides an ideal platform for tracking and managing KPIs on a couple of levels. It’s the only dashboard on the market that enables you to perform root cause analysis for issues, choose reason codes, and determine countermeasures and assign action items to specific people. And that’s important to ensuring you’re focused on the right KPIs in the first place. It also enables you to easily analyze what’s happening across the business (for example, by business unit, facility or location) to determine where new technology might provide the greatest benefit, and then to measure whether or not new investments are moving the needle as expected.
For a close look at how KPI management can help you make smarter strategic digital technology investment, read our white paper: Your Digital Transformation: How KPI Management Software Can Ensure the Greatest Return on Investment.