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Digital transformation is a process that does not end with the implementation of a new system. The real test is whether it brings lasting, measurable business results: lower costs, higher revenues, better customer service, and greater operational flexibility.
In this article, we will focus on how to manage the implementation of digital transformation in the TSL sector – from defining KPIs and measuring ROI, through choosing the right metrics and tools, to maintaining the pace of change.
Here you will find practical tips on how to turn strategy into concrete results and how to prove the business value of digital initiatives to the board and investors.
Translating Strategy into Measurable Indicators – OKRs and the Balanced Scorecard
“What gets measured gets managed” – this well-known management saying fits digital transformation perfectly. Having ambitious strategic goals (discussed in the previous article LINK), we must develop a system for translating them into practice and monitoring progress. Management frameworks such as OKRs (Objectives and Key Results) and the Balanced Scorecard (BSC) prove helpful here.
Objectives and Key Results (OKRs) – Focusing on Key Results
The OKR method gained popularity in Silicon Valley tech companies, but it is also increasingly entering traditional industries (including TSL). Its strength lies in simplicity: for each Objective, we define 2-5 Key Results, which are success metrics for that goal. A well-formulated OKR is understandable at all levels of the organization and removes the “fog” of generalities.
Example: a freight forwarding company sets an Objective to “become the leader in same-day delivery in the region.” A great aspiration, but how to measure it? It then formulates KRs: (1) “reduce average delivery time from 12h to 6h in key cities,” (2) “gain a 10% market share in same-day delivery within a year,” (3) “increase customer satisfaction from 80% to 90%.”
Now the goal stops being a wish – we have concrete numbers to achieve.
Why do OKRs work? Because they enforce discipline and cyclical review. Instead of setting an annual goal and “remembering” it at the end of Q4, OKRs naturally have shorter horizons (e.g., quarterly). Every quarter we check the status: if delivery time is not improving – we analyze the causes and correct actions immediately, without waiting until the end of the year.
OKR works like a GPS – when we go off track, we immediately reroute, instead of discovering the error after the fact. For a CTO, this means ongoing expectation management and rapid response to deviations.
In the context of TSL, OKRs can cover various areas: operational (e.g., “reduction of empty runs by X%”), customer-related (“shortening response time to customer inquiries to Y hours”), innovation (“implementing automation in process Z by the end of the quarter”). It is important that they are ambitious but realistic and – crucially – directly linked to business value. If a key result says nothing about the business effect, it is a sign that it is not a “key” result.
Balanced Scorecard – Balance of Perspectives
However, by focusing on individual OKRs, it is easy to fall into the trap of “silo” thinking. A company might pursue one goal at the expense of another – e.g., chasing cost reduction while neglecting customer service quality, or investing in employee development while forgetting financial results. The Balanced Scorecard (BSC) is a tool that maintains the balance of four key perspectives: finance, customers, internal processes, and learning and growth.
In practice, this means that we evaluate every transformation initiative through the prism of several questions:
- Finance: Will this improve our profitability or lower costs? (If not, why are we doing it?)
- Customers: Will customers feel the improvement (speed, reliability, communication)?
- Processes: Will we improve the internal efficiency of operations?
- Employee/Organizational Development: Will the team learn new competencies, or will the organization become more innovative as a result?
Let’s take an initiative: implementing an AI system for route optimization. What could a BSC evaluation look like?
✅ Finance: Lower fuel costs, fewer overtime hours – improvement of the financial result
✅ Customers: Faster deliveries, fewer delays – customer satisfaction increases.
✅ Processes: Planning automation – the logistics crew spends less time manually planning routes.
✅ Development: Employees gain the ability to work with data and AI, instead of relying only on intuition.
Ideally, the project brings benefits in all four dimensions – then we are talking about a true business transformation, not just one-dimensional optimization. BSC helps identify if we are chasing one goal at the expense of others. If one of the areas is “pulling down,” corrective actions can be taken (e.g., while implementing a routing system, we notice a drop in customer satisfaction – a signal that communication with recipients about shipment status needs to be improved simultaneously).
For a CTO, the Balanced Scorecard is a language for talking to the rest of the board. It shows that transformation is not just about costs and efficiency (finance and process perspectives), but also about customers and people. Such holistic control ensures that digital initiatives support the company’s long-term strategy on many fronts, rather than just fulfilling the IT department’s dream of a “technological novelty.”
ROI and TCO – Speaking the Language of Finance
In any serious company, a project will not pass without a business case. Therefore, financial analytics of transformation – specifically calculating ROI (Return on Investment) and TCO (Total Cost of Ownership) – is a key task for the CTO/CFO when planning changes. The point is to show hard numbers: how much we will invest and what return (savings, additional profit) we will get, and when.
Total Cost of Ownership – Look Beyond the Purchase Price
The mistake of many optimistic business plans is looking at the purchase price of the system as the only cost. Meanwhile, Total Cost of Ownership (TCO) takes into account all visible and hidden expenses throughout the solution’s lifecycle.
What constitutes the TCO of a digital project in TSL?
- Purchase/License Cost: the obvious starting point – e.g., a license for a TMS or telematics system. Often large, but not the only one.
- Integrations and Customization: does the new system require integration with ERP, WMS, or customer platforms? Every API, customization, and interface means additional development costs. Often, integration can be more expensive than the “off-the-shelf” product itself.
- Training and Process Change: people must learn the new tool. How many days will they spend in training (time is money)? Do consultants need to be hired for support? Or perhaps certain departments need to be reorganized? All of this costs money.
- Infrastructure and Maintenance: SaaS subscription fees or server maintenance costs, updates, support, security. In the cloud model, this is often a monthly fee – easy to overlook, but it adds up over the years.
- Potential Disruptions: during implementation, efficiency may drop temporarily (people are learning the new system while the old one runs in parallel), and downtime may occur. This should also be factored in as a temporary cost (e.g., overtime or penalties for delays if the system temporarily slows down service).
Creating such a cost
