Article
3 minute read 29 September 2022

Digital transformation investments: The art and science of measuring the value

If enterprises could consistently estimate and measure digital transformation returns, would their ambitions be bolder? We’re running the numbers.

Tim Smith

Tim Smith

United States

Tim Bottke

Tim Bottke

Germany

Whether investing incrementally or radically overhauling your business model, you can largely establish your legacy as a leader through your digital investments. That’s because digital transformation can be a pivotal bridge between your organization’s success today and its sustained success in the future. These are massive bets, yet they’re often made with incomplete information.

Even if done right, it’s hard to estimate what digital’s rewards might look like, so how can leaders set a confident direction for their organization? How can they prove that there’s measurable value in getting it right? How can they garner support to make bold enough investments in the digital infrastructure and capabilities they need to power their strategic vision and transform their organizations? And how can they keep their organization moving in the right direction?

It takes data—often data that many organizations don’t have, but it’s accessible. It starts with understanding the true value that their current digital portfolio delivers across the enterprise to get the organization thinking of value beyond traditional measures. Next, they should estimate potential returns on future digital investments across the enterprise.

Even that first step—calculating the value of the current digital portfolio across the enterprise—is far from simple. Given the range of variables at play, companies can’t be certain that they’re measuring all the factors that influenced an outcome. The enterprise may be adept at measuring a whole host of “-ities”—reliability, scalability, flexibility, extensibility, security—stemming from a digital investment and can demonstrate that value to peers in the C-suite. This is good, but it’s only part of the value story. How can leaders measure intangibles like increased employee engagement, better collaboration between divisions, or improved customer perceptions? That kind of measurement requires an organization to agree to a value framework and measures, and then do the onerous work of tracking those measurements across all siloes.

As difficult as this is, it’s important because nothing can give you a better picture of the ripple effect of digital value. For example, rolling out a new product in the cloud can mean going to market in months rather than years. Sure, you could measure savings from faster delivery, but what about the additional revenue that the new product brings in since it hit the market sooner? That’s the kind of digital value that many organizations rarely measure. Telling the complete story of how your current digital investments touch nearly every aspect of the business and are driving value across the organization can get more people thinking about the holistic, enterprise-wide impact that digital investments already have. It can also get them ready to trust that big, future investments will deliver big returns in the future.

While there isn’t one formula that shows that X dollars invested in digital will yield Y returns, in our upcoming research, we’re exploring the correlation between digital ambitions, digital bets, and digital returns. Ultimately, the goal is to help leaders make invisible digital value visible across the enterprise, arming them with the data they need to make bolder digital investments and yield exponential rewards—the kind of digital transformation investments that can define a legacy. CEOs need better data to guide their organizations’ digital decision-making and we intend to find it. Stay tuned.

Contributors to this article include Bill Briggs, Lou DiLorenzo, Mark Lillie, and Dalibor Petrovic, leader of Deloitte Canada’s CIO program.

The authors would like to thank Andy Bayiates, Elisabeth Sullivan, and Diana Kearns-Manolatos for their contributions to this article.

Cover image by: Jaime Austin

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Tim Smith

Tim Smith

Core Industry Solutions Offering Leader

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