How to Measure ROI for Your Digital Investments | Nitor Infotech
Send me Nitor Infotech's Monthly Blog Newsletter!
×
nitor logo
  • Company
    • About
    • Leadership
    • Partnership
  • Resource Hub
  • Blog
  • Contact
nitor logo
Add more content here...
Artificial intelligence Big Data Blockchain and IoT
Business Intelligence Careers Cloud and DevOps
Digital Transformation Healthcare IT Manufacturing
Mobility Product Modernization Software Engineering
Thought Leadership
Aastha Sinha Abhijeet Shah Abhishek Suranglikar
Abhishek Tanwade Abhishek Tiwari Ajinkya Pathak
Amit Pawade Amol Jadhav Ankita Kulkarni
Antara Datta Anup Manekar Ashish Baldota
Chandra Gosetty Chandrakiran Parkar Deep Shikha Bhat
Dr. Girish Shinde Gaurav Mishra Gaurav Rathod
Gautam Patil Harish Singh Chauhan Harshali Chandgadkar
Kapil Joshi Madhavi Pawar Marappa Reddy
Milan Pansuriya Minal Doiphode Mohit Agarwal
Mohit Borse Nalini Vijayraghavan Neha Garg
Nikhil Kulkarni Omkar Ingawale Omkar Kulkarni
Pooja Dhule Pranit Gangurde Prashant Kamble
Prashant Kankokar Priya Patole Rahul Ganorkar
Ramireddy Manohar Ravi Agrawal Robin Pandita
Rohan Chavan Rohini Wwagh Sachin Saini
Sadhana Sharma Sambid Pradhan Sandeep Mali
Sanjeev Fadnavis Saurabh Pimpalkar Sayanti Shrivastava
Shardul Gurjar Shravani Dhavale Shreyash Bhoyar
Shubham Kamble Shubham Muneshwar Shubham Navale
Shweta Chinchore Sidhant Naveria Souvik Adhikary
Sreenivasulu Reddy Sujay Hamane Tejbahadur Singh
Tushar Sangore Vasishtha Ingale Veena Metri
Vidisha Chirmulay Yogesh Kulkarni
Digital Transformation | 04 Dec 2020 |   8 min

How to Measure ROI for Your Digital Investments

featured image

With companies facing challenges in the VUCA (Volatile, Uncertain, Complex, Ambiguous) world, the prime topic across the board is ‘Being Digital’ that enables them to embrace the benefits of Digital Transformation.

It is anticipated that companies which fail to adapt to the digital world will undoubtedly fall victims to “Digital Darwinism”, where rigid incumbents may disappear and only the most agile, adaptable and responsive enterprises will survive and remain in the competitive landscape through the integration of the right technology adoption strategy with business strategy.

All organizational leaders would agree with this! But when the board asks, “So what is the ROI that we can expect from the investments made in these digital technologies?”, most of the initiatives start taking a seat on the back burner.

Then how can we define the metric to measure the ROI on digital investments? Before we move on to that, let’s understand what is a metric. A metric is a quantifiable measure used to find the best answer to the posed question in given time and more importantly, with available resources. The metric aims to have a practical impact by translating it into a specific call to action by communicating it to the relevant decision-makers using visual metaphors and non-technical language.

Since now we know what metrics are, let’s discuss how we can identify and classify them to highlight practical business impacts. So, as analyzed during various consulting assignments across industries, all business metrics can be classified into three broad categories:

  1. Revenue Metrics
  2. Profitability Metrics
  3. Risk Metrics

Just to keep the definitions simple and easy to understand, a revenue metrics is outward-facing i.e. mainly related to the marketing and sales function, while the profitability metrics is focused on operations highlighting the efficiency of the processes by which an organization creates and delivers its products and services to its customers, and the risk metrics, as the name suggests, is associated with risk management i.e. tracking potential risks/dangers and identifying ways to mitigate them.

So, to explain the aspect of measuring Digital ROI let’s elaborate this with an example for Revenue Metric (since this is a major challenge associated with the VUCA world for businesses). One of the common challenges today faced in Sales to Order process is that of partial automation. So, what do I mean by partial automation? It is the use of applications to automate the process as it is in order to assist the field salesperson with regular tasks of data entry and alerts/notifications. But such applications can only help you achieve productivity gain, not revenue gain. Instead, let’s look at a sales application embedded with advanced analytics and AI to help the field sales person with right insights at a given time i.e. to provide appropriate answers to the right questions at any given point. Let’s elaborate this further by assuming that a field-salesperson is about to visit 8 dealers today as per the visit plan flashed by the sales application. While he is visiting each dealer, the application can highlight some of the critical insights like how much sales has the dealer booked till date versus that of last year same time, how much of competitor stock does he have today (based on his visual analysis and insights from the field which these guys are good at 🙂 ), opportunity to cross-sell products from the catalogue considering the dealers market share and customer base (company marketing team captures this data as part of the dealer meets they conduct).

With the plethora of information gathered from across various touchpoints in a customer journey, the application can share visual reports for faster and easy decision making. Here the various metrics which can help the field salesperson book more sales leading to increased revenue can be Dealer Performance (YoY Contribution), Customer Lifetime Value, % of sales lost, Sales Cannibalization rate, and many more.

To reiterate on the categories of the metric, I cite an interesting definition I came across- “Revenue metrics are for optimistic extroverts, profitability metrics for fastidious perfectionists, and, risk metrics for informed skeptics”.

So, I am sure that with the focus of all organizations towards harnessing the power of technology, identifying and defining right metrics across all the three broad categories discussed today with help track, they can monitor and act on the expected ROI from the identified initiatives.

Reach out to us at Nitor Infotech if you want to know more about the relevance of measuring Digital ROI and, empower your Organization to reap the benefits of Digital Transformation.

Related Topics

Artificial intelligence

Big Data

Blockchain and IoT

Business Intelligence

Careers

Cloud and DevOps

Digital Transformation

Healthcare IT

Manufacturing

Mobility

Product Modernization

Software Engineering

Thought Leadership

<< Previous Blog fav Next Blog >>
author image

Neha Garg

Associate Director

Neha has over a decade of experience in Marketing, Research, Technology, and Business Strategy blended with success and failures as a serial entrepreneur. She is also equipped with professional qualifications in computer engineering, public relations, and pursuing industrial psychology. Her daily work life includes helping Global Enterprises identify and define a relationship between Technology & Business Objectives. Over last 3 years she has been associated with Indian Manufacturing industry to study challenges and analyze trends as they walk their path towards digital transformation. When not working she is seen on road exploring country side and creating memories by tasting local cuisine 😊.

   

You may also like

featured image

10 Heuristic Principles in UX Engineering

Say, you’ve built a modern, cutting-edge application. It has a complex, multi-layered user interface (UI), that is the basis for some amazing features. Since you’re the one who has built the applic...
Read Blog


featured image

ETL Testing: A Detailed Guide

Just in case the term is new to you, ETL is defined from data warehousing and stands for Extract-Transform-Load. It covers the process of how the data is loaded from the multiple source system to t...
Read Blog


featured image

Getting Started with ArcGIS Online

GeoServer is an open-source server that facilitates the sharing, processing and editing of geospatial data. When we are dealing with a large set of geospatial d...
Read Blog


subscribe

Subscribe to our fortnightly newsletter!

We'll keep you in the loop with everything that's trending in the tech world.

Services

    Modern Software Engineering


  • Idea to MVP
  • Quality Engineering
  • Product Engineering
  • Product Modernization
  • Reliability Engineering
  • Product Maintenance

    Enterprise Solution Engineering


  • Idea to MVP
  • Strategy & Consulting
  • Enterprise Architecture & Digital Platforms
  • Solution Engineering
  • Enterprise Cognition Engineering

    Digital Experience Engineering


  • UX Engineering
  • Content Engineering
  • Peer Product Management
  • RaaS
  • Mobility Engineering

    Technology Engineering


  • Cloud Engineering
  • Cognitive Engineering
  • Blockchain Engineering
  • Data Engineering
  • IoT Engineering

    Industries


  • Healthcare
  • Retail
  • Manufacturing
  • BFSI
  • Supply Chain

    Company


  • About
  • Leadership
  • Partnership
  • Contact Us

    Resource Hub


  • White papers
  • Brochures
  • Case studies
  • Datasheet

    Explore More


  • Blog
  • Career
  • Events
  • Press Releases
  • QnA

About


With more than 16 years of experience in handling multiple technology projects across industries, Nitor Infotech has gained strong expertise in areas of technology consulting, solutioning, and product engineering. With a team of 700+ technology experts, we help leading ISVs and Enterprises with modern-day products and top-notch services through our tech-driven approach. Digitization being our key strategy, we digitally assess their operational capabilities in order to achieve our customer's end- goals.

Get in Touch


  • +1 (224) 265-7110
  • marketing@nitorinfotech.com

We are Social 24/7


© 2023 Nitor Infotech All rights reserved

  • Terms of Usage
  • Privacy Policy
  • Cookie Policy
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. Accept Cookie policy