How to Measure Success of a Digital Transformation Project

Introduction

To assess Unhappy Bank’s current performance against its objectives and strategies, performance measurement tools were defined. One such tool was the Balanced Scorecard (BSC), which comprises four key performance areas: financial, internal business processes, learning and growth, and customer.

Balanced Scorecard

Below diagram illustrates the BSC that was designed for Unhappy Bank. This Balanced Scorecard provided a comprehensive overview of the bank’s performance across all four key areas, enabling the bank to focus on areas that require improvement and capitalize on areas of strength. The three icons (green arrow, red arrow, yellow card) clearly indicate the areas that the Bank is doing better, worse or the same.

Unhappy’s Bank Balanced Business Scorecard

Business Performance Measurement

  • Critical Success Factors (CSFs): The areas in which an organisation must succeed in order to achieve positive organisational performance.
  • Key Performance Indicators (KPIs): These are specific areas of performance that are monitored in order to assess the performance of an organisation. Key performance indicators are often identified in order to monitor progress of the critical success factors. Measurable targets are set for KPIs.
  • Performance targets: Targets for specific areas.

Example of Unhappy Bank:

  • CSF: Increase market share
  • KPI: % of business
  • Target: +10%

Update 13-Jul-23: William Meller wrote an excellent article about the power of the Balanced Scorecard.