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THE KPI DASHBOARD
1. Importance of KPIs • Explain what Key Performance Indicators (KPIs) are important and how they can be used to track the progress and risks related to the digital transformation effort (i.e., using AI to improve services). 2. Infographic: Create your graphics using an AI (such as Perplexity AI, ChatGPT, Google Gemini, Claude AI). Practice with different prompts to get a picture you like. • Identify three (3) KPIs related to the digital transformation effort. • Provide a brief description of what each KPI will measure and its importance. • Insert your infographic into the analysis report. 3. Risks and Mitigation Strategies • Propose three (3) potential leadership risks leaders may face as they work through the digital transformation effort and provide a mitigation strategy for each risk. *Each mitigation strategy must include credible support (i.e., APA citations).
Sample Answer
Key Performance Indicators (KPIs) for Digital Transformation
Key Performance Indicators (KPIs) are quantifiable measures used to evaluate the success of an organization or a particular activity, such as a digital transformation effort. When using AI to improve services, specific KPIs are crucial for tracking progress and identifying potential risks.
KPIs help by:
Tracking Progress: They provide clear, objective data on how effectively the AI-driven transformation is moving from its initial state to its desired future state.
Risk Identification: A negative or stagnant trend in a relevant KPI can serve as an early warning sign for risks like poor user adoption, technical issues, or insufficient ROI.
Informing Decisions: They offer the data needed to make informed decisions, allowing leaders to adjust strategy, allocate resources, or intervene where performance is lacking.
📈 Selected KPIs for AI-Driven Service Transformation
Here are three KPIs important for tracking the progress and risks related to a digital transformation effort focused on improving services with AI:
1. Customer Effort Score (CES)
Measurement: CES measures how easy it is for a customer to interact with or use the AI-improved service. It's typically gauged through a survey question, such as, "To what extent do you agree with the following statement: The organization made it easy for me to handle my issue?" The score is the average of responses on a scale (e.g., 1-7).
Importance: A low CES is a strong indicator of service delivery risk. If the new AI-powered service (e.g., an AI chatbot or automated process) makes tasks harder for the customer, it defeats the purpose of the transformation and can lead to customer frustration and churn. Tracking a decrease in CES over time demonstrates successful simplification of the customer journey, a key goal of AI-driven service improvement.
Service Automation Rate
Measurement: This KPI calculates the percentage of total service inquiries, transactions, or processes that are handled end-to-end by the AI/automated system without requiring human agent intervention.
Importance: It directly measures the efficiency and scale of the transformation. A low or slowly increasing automation rate indicates a risk of insufficient return on investment (ROI) from the AI technology. The goal of using AI is often to free up human agents for complex tasks; if the automation rate is low, the expected cost savings and efficiency gains may not materialize.
3. Employee Adoption Rate of AI Tools
Measurement: This tracks the percentage of relevant employees (e.g., service agents, back-office staff) who are actively using the new AI tools (e.g., AI-assisted ticketing, knowledge base systems, generative AI support) as part of their standard workflow.
Importance: It addresses the organizational change management risk. Successful digital transformation relies on human-machine collaboration. A low adoption rate signals resistance, lack of training, or a poor user experience with the new tools. This poses a risk to both the expected efficiency gains and overall morale, as staff may revert to old, less-efficient processes.
🛡️ Risks and Mitigation Strategies
Digital transformation requires significant organizational and leadership shifts. Here are three potential leadership risks and corresponding mitigation strategies: