ROI is always an important topic, but it means more in the current economic climate, which has been throwing off mixed messages on a daily basis. I wanted to take a moment and reflect on the importance of measuring the right metrics and offer some insights as to how organizations can get the most out of their tech investments.
Metrics are the map
When you go on a car trip, it’s pretty hard to know where you’re going if you don’t have a map (usually on your phone). They help us know the way and track toward our destination.
In business, the route to that destination — or even the destination itself — can change based on shifting circumstances. This is why we talk so much about the need for agility. If your organization is heading for Point A and circumstances change, you can’t be so rooted that you continue on the same path toward Point A when logic and data are now telling you to change the route or even navigate to a new Point B. Measurements and metrics keep us focused on the location of our final destination and the best path to that place. Simple as that.
Side note: measuring success is just as important during tough times as it is during boom times. Having agility built into your processes is critical so that when conditions change, you can intelligently recalibrate the possible outcomes.
Front-end challenges
Is it easy to set KPIs, capture the right data and make it matter to those in the organization? Of course not–especially if you try doing it manually. It takes work up front and can begin by asking some of these important questions:
- Do we have the right data contained within our systems to set reasonable KPIs and track success?
- Are we establishing KPIs and measurements early enough in the initiative that we’ll all be on the same page when leaders go through the process of integrating or licensing a new technology?
- ROI aside, do we have KPIs around things like how we are going to deploy the technology, how we are going to integrate it, how it’s going to be adopted, and what success will look like?
Not just metrics but the right metrics
By putting in the time upfront to understand where you’re going and what metrics are most applicable, your efforts will more positively impact the company’s bottom line.
If you measure the things that matter, including employee and customer satisfaction, they will translate into that bottom-line impact. If you develop the wrong metrics or have the wrong intended outcomes, you’re dooming yourself from the start.
At a recent executive panel, leaders from DoorDash and RSM Consulting joined me to weigh in on measuring the metrics that matter. Alex Barr, Senior Manager of Revenue Data at DoorDash, says the wildly competitive food delivery industry requires a laser focus on key KPIs. “For us, it’s really important to track things like speed, reliability, and quality,” Barr said. “For speed and reliability KPIs, we have average delivery time, which includes the time it takes from when the order is received to when it’s delivered.
Quality APIs could be meal ratings from our customers that reflect their experience with the food, the delivery driver, and the platform itself.” Barr and his team also look at things like order volume and average order size per restaurant, which not only helps them but the merchants and restaurants with whom they work.
While these specific metrics contribute to the bottom line, other measures are far broader than that. Brad Collins, Enterprise Digital Transformation Leader for RSM says he is very focused on their people. “Our people are our lifeblood. Without our people, we don’t have a professional services organization. So we are always measuring and serving both our people and our partners. We do the same for our owners to make sure that we are aligned with our goals.”
Both Alex and Brad endorse the idea of a balanced scorecard that takes a holistic approach across KPIs. It can be a great way to avoid having too narrow a focus. After all, the path to fiscal success starts with happy, productive employees working in harmony to produce exactly what customers need the most, whatever that may be.
The importance of consensus
Getting agreement among various stakeholders is another challenge when establishing the metrics that matter most. This is another reason why it’s important to get alignment upfront, especially when your goals and technology platforms are shared or dependent upon multiple platforms.
Look for agreement among key stakeholders on topics like:
- A balance between long-term growth and short-term performance
- ROI with regards to tech spend
- How metrics relate to value
- How alignment can work across and down from an end-to-end perspective, how we can design systems to support goals and KPIs and cascade from leadership down to the tactical/execution level
The holy grail
Why are automated analytics platforms like Alteryx so critical in measuring important metrics and realizing ROI? Simple: the better the insights you have – and the faster you can get to them – the better the decisions you’re going to make. Every right or wrong decision your organization makes has ramifications that tend to multiply. With so much volatility in the markets, it becomes even tougher to rebound from any wayward decisions. It can literally be the difference between success and failure.
An analytics platform like Alteryx enables your teams with easy-to-use, self-service tools that help business analysts in any area convert disparate data sources into integrated, transformed data sets. Users who are closest to the data sources can help create more trustworthy, accurate, and useable data sets by authoring workflows that fit in with existing governance processes. This sets the basis for the automation of manual work, leveraging more well-connected and standardized workflows and the ability to link different data sets, see interrelationships of data, and ultimately enhance end-to-end decision-making.
All of this enhances visibility and governance; and speeds up that critical time to insight which helps create better, smarter, more informed decisions across the enterprise. Best-in-class companies can thus mature and accelerate their data & analytics maturity and create sustainable sources of value and capacity unlock for their organizations.