Measure What Matters: Six Metrics Every CDO Should Know
The chief digital officer has to juggle multiple priorities, foci, and investments, ranging from within the enterprise to its edge. Having been charged with growing an enterprise's business, CDOs need to enable their companies to successfully undergo a digital transformation. This digital transformation includes enabling the enterprise to plan, build, and maintain products as well as market to, sell to, acquire, retain, and support users through digital or digitally enhanced products and processes.
Defining a successful digital business strategy requires a deep understanding of users’ preferences and behaviors and also requires the ability to track changes in user behavior and their consumption and demand patterns. Understanding users’ preferences and behaviors requires the ability to track customer behavior over time and across channels. Tracking changes requires a set of analytics that enables the CDO to measure, at an aggregate level, the behavior of segments and micro-segments of users and also to understand, at the individual level, the current state, engagement, and problems faced by a user or a partner.
Building a digital enterprise requires the ability to track and accelerate innovation, agility, and experimentation in the enterprise. Democratizing access to data and building-block services for developers requires a systematic audit, curation, and exposure of enterprise capabilities as reusable APIs with the ability to track, monitor, and aid the usage of such services by developers and partners efficiently, quickly, and successfully.
Here are the six dimensions of an analytics plan that a CDO should build and track to enable better decision making.
A CDO’s main goal is to grow the enterprises’ business. To achieve this, the CDO must track two key types of business KPIs: traditional business KPIs and digital KPIs.
Traditional Business KPIs are those that the enterprise uses to run the business, such as customers, average revenue per user (ARPU), churn, and revenue/profit.
Digital KPIs include traffic and revenue from digital touchpoints and the total and rate of acquisition of new users, customers, developers, partners, and devices. Tracking business KPIs involves tracking both the absolute numbers and the trends, which can signify changing consumption and demand patterns and serve to alert the CDO about potential problems with customer satisfaction or the services supply chain.
Specifically, a successful CDO will:
set up organizational structure and processes to understand and attribute KPI changes to market, competitive, or product forces
- define marketing and product strategies to drive usage, revenue, customer, developer, and partner acquisition and retention
Digital transformation can be defined as, and measured by, the acceleration of innovation and agility in an enterprise that ultimately leads to new, compelling user experiences and is marked by higher usage and revenue.
CDOs should measure the following aspects of digital transformation to detect organizational and personnel challenges around innovation, process roadblocks that hurt agility, and a lack of crisp product and/or platform positioning that impacts both reach and the level of partner and developer engagement.
Innovation: The ability of the enterprise to bring new, compelling products and services to market, measured in the APIs and apps delivered to users. New products can be defined as new products for existing users, products designed to attract new users, or new markets and products designed to attract users of competitive products.
Agility: The ability of the enterprise to improve its products and services, measured by the rate of improvement of apps and APIs. In other words, how quickly can an enterprise expose its services as APIs and how quickly and easily can these APIs be adopted by developers and consumed by apps?
Reach: The ability of the enterprise to attract new users, developers, and partners to their platform, products, and services, measured by the rate of new user, developer, and partner acquisition and the churn rate of these users, partners, and developers.
Time to Maturity: The time taken by APIs and apps to “go live” and be used by real users, as measured by the time from the first definition of the app or API to when it is available for consumption.
Partner and developer engagement: Developer and partner engagement with the enterprises’ platform as measured by the rate and breadth of platform features usage over time, including the rate-of and time-to success of developers and partners.
Ecosystem density: The measure of the "consumption" and "supplier" relationships that an enterprise has with other businesses (through APIs). Let's take as an example an API that allows you to send photos to print from your mobile device. When used by and offered from services like Shutterfly, Flickr, and Instagram, for example, this API is the core of a much denser and robust ecosystem than if it were being used solely by any single app or website.
Similarly, say an app were to consume not only the print API but also APIs that offer users related services, such as viewing photos online and creating albums and slideshows. Then that app offers a richer experience to its users than if it only offered the print API functionality. The progress and success of an enterprise’s digital transformation can be measured by the density of the ecosystem—by how connected and how integral a part the enterprise plays in its digital supply chains and how robust the complex partnership models and supply chains are.
Specifically, a successful CDO will:
audit and optimize organizational setup and process efficiency regularly to understand rates of innovation and agility and identify internal roadblocks
commision strategies for improvement of developer and partner engagement through new products and services and better support and training
- understand and remove bottlenecks in partner and developer onboarding, including the most common reasons for failed or prolonged onboarding process
The most pronounced impact of a digital transformation is evident in the changing behavior and transaction patterns of an enterprises’ users. Digital channels sometimes replace or cannibalize traditional channels, but more often they help and enhance multi-channel transactions. As customers navigate and interact with the enterprise across multiple channels, a CDO needs to be constantly aware of the shift in those customers’ product access and acquisition patterns. This awareness is shuttled into strategic investment decisions across channels and often into building bridges between channels to enable easy context switching for users.
Channel awareness is turning out to be one of the key tenets of data-driven decision making for the CDO.
A successful CDO will:
- define product strategies to enable better cross-channel usage of your products and services
- define and design channel-specific workflows and cross-channel workflows to adapt to end user usage patterns
- traffic and revenue by channel
- the most common channels where high value transactions begin and end
- transactions that transcend multiple channels
- users that use multiple channels to start and end transactions
- users that shift and change the channels through which they interact with the enterprise
Apps and APIs
The CDO brings the app and API revolution to the enterprise by exposing old and arcane services as reusable, lightweight, and accessible APIs, designed to be consumed by lightweight and purpose-built apps.
CDOs track app and API metrics to understand and track the adoption, engagement, and usage of their products and services and to determine, optimize, and fine-tune investment decisions. Metrics include revenue, traffic, QoS, unique users, ratings of apps (consumer) and APIs (partner/developer), active apps, devices, and geo-distribution of traffic and revenue.
A successful CDO will:
track and understand trends and changes in KPIs, inlcuding unique users, usage, and app ratings to implement product strategies to build better products
use KPIs as an impetus to explore new market and customer segment opportunities and make timely investment decisions
Developers and partners
Developers and partners are the channels to grow the enterprise. A healthy developer community and a diverse partner ecosystem is a sign of a thriving enterprise and a leading indicator of digital success. CDOs should measure the cost and likelihood of developers and partners successfully onboarding to their platform and launching new and innovative apps that are desired and used by users. Metrics such as cost of developer acquisition (CODA), partner onboarding success rate, and partner onboarding time are key to tracking the health of the developer and partner community. At any point, the CDO should have information about the revenue and traffic from a partner/developer, the QoS experienced by the partner/developer, apps built by these partners and developers, and the unique users delivered via these apps. This information is used by the CDO to fine-tune developer/partner onboarding processes and to craft marketing strategies that attract, retain, and engage developers and partners.
A successful CDO will:
define strategies to reduce cost of developer and partner acquisition and onboarding
remove bottlenecks and provide a better developer experience to strengthen platform adoption
News: internal, ecosystem, and external
Last but not least, CDOs need to stay abreast of relevant news and information that impacts their industry, ecosystem, enterprise, organization, or specific app or API team. CDOs should track how their apps and APIs are being talked about on social media, and listen to learn about product or service issues that are likely to cause dissatisfaction for developers, partners, and users. In addition, they should closely track how new releases and versions of their services, APIs, and apps impact usage and revenue.
A successful CDO will:
manage the perception of a business’ products and services on social media and arrest and address negative trends and user and developer dissatisfaction
design and implement market and competitive research pipelines to uncover new trends and changing end-user behavior patterns
A CDO is tasked with a challenging job: to be the chief digital strategist for the enterprise, and to shake up an enterprise and make it digitally relevant and able to successfully adapt to changing user preferences, behavior, expectations, and access patterns. A data-driven approach and culture is the best asset that a CDO can nurture in the enterprise to make objective decisions and track the impact of those decisions and actions.
If you are a CDO, we would love to hear from you about analytics and other techniques that you are using to bring about the digital revolution in your enterprise!