Digital Transformation: ROI & Justifying the Investments

3 minutes read
on 05 November, 2018

Digital transformation is not just a keyword that is buzzing around. It is a strategic goal and a top priority set forth by many business leaders.

Not many enterprises have managed a successful digital transformation. There are certain challenges that make digital transformation difficult. But the one challenge that is commonly found across industries is investment.

Digital transformation requires commitment from the highest level of decision makers of an enterprise. This means there are funds and resources that need to be set aside for it. However, both these resources are scarcely available and need to be utilized wisely.

The ROI has to be proved before any investment decisions are made, especially when there are multiple initiatives on the table demanding attention.

Digital Transformation & Traditional ROI

In most businesses, the ROI calculations usually depend on payback period or breakeven analysis. In some cases, the internal rate of return is given prominence. In simple terms, the gains from an investment are divided by the cost of making the investment to gauge its viability.

Now when it comes to digital transformation, things become a little complicated. Many consider digital transformation a one-time initiative of redefining and restructuring the business. If this is the case, then your ROI calculations would show that it wouldn’t be wise to spend millions behind the exercise. After all, you would be dealing with things like technology legacy, aging inventory, and technical debt of the enterprise.

But if you consider digital transformation a way of existing and doing business in the future, then making that million-dollar investment seems wise. You cannot build the futuristic business models and processes on aging systems.

If you are going to build a business case that presents digital transformation as a way of developing and launching new products or services, then your ROI projections will change and possibly look more lucrative.

Is Digital Transformation Really Pricey?

The response to this question depends on who is leading the digital transformation drive. In the early days, when technical leaders were driving the initiative, the projection of digital transformation and expectations from it were different. However, now with CEOs taking charge, the business case for it has changed.

When we work with CEOs on creating a business case to seek funding, we always tell them that there are two sides to digital transformation. One is the side that helps them save money by addressing operational inefficiencies, changing the way ideas are taken to marketplace, accelerating innovation, etc. It helps you understand your customers better which in turn impacts your product design and service delivery cycles.

The other is the side that helps enterprises improve revenues. Digital transformation helps you launch more relevant products and services, reduce go-to-market time, identify trends and patterns early, redefine supply chain and sales strategy, etc. it also helps you create a superior customer experience through omni customer view which turns brand loyalists into brand advocates.

Digital Transformation – Do It Right

There are some leaders who believe that digital transformation is priceless!

But if you are one of those leaders who is worried about the returns on the funding, the time is now for you. Even if the ROI calculations don’t look stellar, the business benefits outweigh all projections.

We believe that there are only three real threats when it comes to digital transformation:


  • Incorrect understanding of digital transformation

  • Having the wrong strategy in place.

  • Having the wrong skillsets and mindsets implementing the strategy.


Our digital transformation evangelists work with business leaders to address these three things and prepare a business case for getting the money and resources invested in the process.

If done right, digital transformation is not an initiative that would let you down. It would only add to your growth.