What Is A Litmus Test In Business

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What Is A Litmus Test In Business – Digital business is today’s reality and the future of every business. Many companies relate their progress or success to digital wallet share, revenue growth, profitability, the number of new products or services, or the addition of new customers each year or quarter. Although financial performance is an indicator that should certainly be evaluated. Business growth, but it doesn’t show how sustainable your digital business is, or how effective you are as a digital company, or how effective your organization’s digital life is?

Measurements related to digital health, digital efficiency and digital sustainability are very important, especially if a company is digital today or claims to be a digital company. Companies should regularly perform digital litmus tests and measure digital litmus scores corresponding to the average of financial metrics. Measuring digital business finances is easy, but measuring digital health, efficiency and sustainability is difficult. Very few companies measure such indicators perfectly. It is not about the gut feelings of senior managers or the percentage of digital on paper or accounts, but more about examining the basic reality of digital implementation on the ground. Implementing a simple strategy is the hallmark of success in the digital litmus test for many businesses.

What Is A Litmus Test In Business

What Is A Litmus Test In Business

The digital health test, digital efficiency and digital sustainability test can be called together as the digital litmus test. The digital litmus test is important for companies of all sizes.

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The challenge for companies is not to find the right digital strategy, the right vision or the right market or the right product, but rather to use a digital approach, maintaining the digital pace and providing at a faster pace than the competition.

The situation or challenge today will not be the same as yesterday. How you prepare today and tomorrow determines your readiness to pass the digital litmus test.

There is a simple way to measure it, it just needs attention and seriousness. In a sense, it is a reflection of your organization’s digital culture. The sad thing is that companies are still measured by traditional surveys and questionnaires, which are not effective measurement methods. If you are really concerned about the digital culture, you should refer to Glassdoor reviews or PayScale feedback or leave interview feedback instead of relying on internal surveys that give a better picture of the organization. Your attrition rate, employee morale, learning opportunities, growth opportunities, salary, level of employee engagement, diversity, benefits, quality of leadership, etc. The digital litmus test should evaluate feedback from employees, customers, key stakeholders and compare it to the competition! Consistently taking timely course corrections is the only way to fix a bad litmus score.

The increasing fragmentation of digital supply today is one of the main reasons for regularly measuring digital sustainability. The demand for digital skills, digital skills and digital talent is very high and is expected to grow in the next few years until the supply of digital talent is exhausted or exceeds the market demand.

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The risk of failure in digital projects has increased in the modern era due to new challenges in digital operations. The ongoing situation with COVID added another variable to the whole equation, where remote processing, remote collaboration and remote management were tested for the first time. Although things are still working so far, digital fatigue, low engagement and pandemic frustration are starting to affect work, productivity and employee morale in many companies. Gentle people, production factors will eventually affect the quality of products or services in many companies and are expected to blur the boundaries of company differentiation in the new digital age. Operating costs and digital hiring costs have multiplied over the past 18 months due to unexpected digital needs.

Those who ignore the soft metrics of the digital litmus test (including digital health, digital efficiency and digital sustainability) are forced to look at it because of the existing pressure or because of the increase in the number of failures or delays in the implementation of the project. . or a decrease in income. Many companies miss digital opportunities in the competition without knowing the real reason or reason for it. Many are busy with root cause analysis and few have hired outside experts to solve the problems they know. To sustain a business, a continuous focus on the digital litmus test is required.

Those familiar with the litmus test may remember how easy it is to use litmus paper to find the properties of a substance as acidic, neutral, or basic. Similarly, the company should create a simple way to conduct a digital litmus test to assess what are the strengths, weaknesses and opportunities for development change. This is not a SWOT analysis, but a simple hygiene assessment to perform, strengthen and find gaps in the company’s current operations. Below are simple factors that companies should keep in mind when developing a Digital Litmus Test.

What Is A Litmus Test In Business

Although the digital litmus test method may differ from company to company based on the nature of their industry, a simple DLT framework can help companies effectively measure and navigate today’s digital challenges.

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This litmus test should be easy to do with the simple method of entering points as values ​​0, 1 and 1. (0 for neural, 1 for positive litmus value and -1 for below litmus value). A higher numerical scale can also be used (eg -5 to 5 litmus scale) to test different elements similar to the pH scale used in the standard litmus test. One may decide to assign different weights to the factors mentioned above and calculate the overall digital Litmus score. For an effective method, should check the litmus test every month or at least once a quarter to find the most influential parameters. A high or positive litmus of good results over several months shows that the company has good and sustainable digital progress and can excel in digital business. Without measuring what is happening there, there is no way to detect and repair digital cracks. It is clear that gut feelings must be kept in check.

In the real world, the litmus test should give the same result for the substance being tested at any time. Since not everyone knows all the KPIs used in every organization, it makes sense to share a random digital litmus test between SMEs, employees and customers. This classification helps to remove the subject or bias or influence of the powerful who do not know or do not know the basic reality of business or mainly related to financial parameters. Internal customers must be involved in the design of litmus tests and informed about the final goals of the project, while CSAT or NPS methods can be directly measured using customer feedback.

Those who call digital litmus tests “nice to have” should help implement or have litmus tests in other ways so that their participation and commitment will be tested over time. Digital litmus testing works best when there is clear accountability and ownership across the organization for each parameter defined within the digital testing category. However, most organizations have good ownership in measuring financial parameters, but often have poor or poor ownership of soft areas, including digital sustainability, digital health and digital performance. It is time to thoroughly test the digital business with the litmus test and get course corrections at the right time.

Businesses need a simple way to find the obstacles that prevent them from achieving digital results. The sooner it is found and done, the better it is to correct the course. One of the easiest ways is to do the traditional litmus test. A digital litmus test is needed to assess digital health, efficiency and sustainability together. Digital impact factors can be defined or followed by each industry or business type, but these methods cannot be ignored or taken for granted or taken based on the feelings of top management.

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Digital business is a fragmented and constantly changing ecosystem. Any shortcut or delay in dealing with digital challenges without analyzing the limitations of the implementation will certainly be costly.

On average, a delay of 1 quarter in measuring or adjusting the digital litmus score can set the organization back or penalize it for at least 2 quarters or more, so focus and timely action is very important.

The litmus test should be simple so that everyone in the organization can perform the same test at any time based on each knowledge area. It is not an organizational maturity check, which is a complex and time-consuming test, but a simple immersion test (litmus test) that gives an idea of ​​where the organization is heading and what the spirit of the organization is. .

What Is A Litmus Test In Business

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