Part 2 of 4 in Digital Transformation Series

3d people - man, person with arrow and KPI ( Key performance indicator)We know that despite the disruption change brings, digital transformation can bring your enterprise agility, efficiency, and quality like nothing else can. This is demonstrated repeatedly thanks to the KPIs (Key Performance Indicators) companies set in order to test IoT (Internet of Things) performance in various areas.

In today’s market, business leaders are hoping to see change quickly due to the upheaval caused in the market thanks to the pandemic, global supply chain issues, and recessions. Many businesses are fast tracking digital transformation projects in order to get the results they want as quickly as possible.  Overall, the improvement of operational performance such as equipment effectiveness, labor efficiency, and output are high ranking KPIs. However, each area of industry will have differing priorities. In most industries, the greatest areas for improvement lie in cybersecurity, safety, and waste reduction.

In an in-depth survey and interview that crossed industries and regions, Microsoft found that many industries held similar KPIs and prioritized use cases to the same degree of importance. Priority KPIs include:

Increase in OEE

The increase in OEE (Overall Equipment Effectiveness) is the highest ranking manufacturing KPI for measuring the success of their smart factory strategies; 86 percent of manufacturers surveyed agreed that this increase was either important or very important.

Manufacturers are laser-focused on operations. In addition to improving OEE, increase in labor efficiency, increased output, decrease in costs, and increase in quality all rank highly in determining success of technologies and processes. All these KPIs can be improved by IoT use cases such as remote asset monitoring, predictive maintenance, and IoT-based process automation.

Increase supply chain resiliency

Global supply chain issues were sparked by pandemic lockdowns, but they were spurred on thanks to natural disasters, global conflicts, and various other unforeseen catastrophes. Due to this, supply chain resiliency increase is a must for manufacturers, as demonstrated by 74 percent of surveyed businesses’ responses, and IoT-based technology has demonstrated itself to be a smart way to defend a business from global turbulences.

Increase in revenue

Seeing an increase in revenue is important after spending money, time, and effort on new IoT technologies. Customers expect industry vendors to deliver high-quality, highly customized products in a timely manner. That means doing things well and quickly the first time. IoT tools lead to customer satisfaction, which means referrals and return customers, and thus a greater increase in revenue.

Increase in ROE/ROCE

ROE (Return on Equity) and ROCE (Return on Capital Employed) are financial ratios used to appraise a company’s profitability and capital efficiency. In terms of KPI, businesses will measure how much net income is produced for the cost of an asset. Businesses who aim to have more efficient production processes with smart factories can also work towards bettering the ROE/ROCE.

Reduction of waste

Over half the manufacturers surveyed reported that sustainability and waste reduction were pivotal elements of smart factory conversion. Some even hold it to as high of a priority as operational KPIs. The decrease in waste and carbon footprints is a tangible improvement that can be measured. In addition, these reductions add to other benefits. For example, a reduction in energy usage or waste often leads to a reduction in costs. Also, an increase in process efficiency can lower energy usage and create a better carbon footprint.

At a time when customers are calling for sustainability, transforming into smart factories and using IoT to minimize waste will also earn customer trust and business.

Decrease in safety incidents

Another trending KPI is a decrease in reported safety incidents. Smart factories can provide safer working conditions in a myriad of ways. The technology can sense hazards in the machines and software, as well as the employees. Wearables, sensors, and cameras are just some of the ways smart factories can keep employees safe.

Safe employees are more productive and more prone to remain in their current position.


Each industry may have its own priorities for KPIs in their enterprise, but currently, these are the highest trending. If you are ready to transition your company into the digital world of smart factories, allow Godlan to help you find KPIs that will truly demonstrate the growth that technology can bring to your business. Prophecy IoT® can enhance your enterprise and save you, your employees, and your customers time. No need to waste effort or energy. Contact our team today at or by calling 586.464.4400.