In business-to-consumer (B2C) contexts, sellers of technological innovations have a well-established tool to assess the value and revenue potential of their offerings: the buyer–utility map. Introduced by Kim and Mauborgne (2000), this framework helps sellers evaluate the standalone value of an innovation and estimate the sales revenue it can generate.
In business-to-business (B2B) settings, and also when evaluating intra-firm digital innovations, managers face a more complex challenge. Rather than focusing solely on standalone value, they must understand and quantify how a digital innovation affects organizational performance, whether within their own firm or across their customers’ businesses. To address this challenge, Nirji and Geddes (2016, 2023) propose a comprehensive framework that organizes the impact of digital initiatives across six business areas: customers, employees, operations, infrastructure, safety, and the innovation process.
This page adopts a broader and deeper view of return on investment (ROI) by explicitly linking these business areas to value creation, digital KPIs, and financial outcomes. Each business area is associated with specific metrics and Key Performance Indicators (KPIs) that make the value created by digital innovations observable and measurable. By translating improvements in these value areas into digital KPIs, and then linking those KPIs to revenue growth, cost reductions, or risk mitigation, innovators and managers can build more robust and transparent ROI assessments.
To illustrate this logic, consider an innovation that improves a customer’s operations by streamlining processes and increasing efficiency. The value created may first become visible through operational KPIs such as response times or the number of interactions required to resolve issues. These KPI improvements can then be translated into financial terms by estimating the customer’s willingness to pay for faster service, lower coordination costs, or improved reliability. In this way, utility creation, digital performance metrics, and financial gains are connected through a clear and systematic logic.
| Business areas | Examples of possible metrics or KPIs | Impact on Profitability (NPV) of Digital Innovations (examples) |
|---|---|---|
| Customers Creating compelling experiences; meeting and exceeding customer expectations |
Net promoter scores (NPS) Average Order Value (AOV) Social media sentiment Customer reviews and feedback |
Sales revenues: Willingness to pay for brand equity |
| Employees Enabling and engaging employees |
Engagement scores Collaboration Likelihood to recommend Turnover Adoption of new practices |
Sales revenues: Willingness to pay for decreased turnover |
| Operations Digitising business processes |
Manufacturing throughput Just-in-time inventory levels Supply chain efficiency Response times in problem-solving interactions Number of interactions to resolve an issue |
Sales revenues: Willingness to pay for decreased response times and interactions |
| Safety and soundness Protecting digital assets and customer data |
Number of threats detected and defended Number of privacy breaches Fraud losses |
Sales revenues: Willingness to pay for safety and soundness |
| Infrastructure Implementing and running new systems and tools |
Speed of new technology implementation Uptime Response time to resolve issues/outages |
Sales revenues: Willingness to pay for uptime |
| Disruption and innovation Prototyping, testing and learning; promoting digital culture |
Percentage of budget allocated for disruptive technologies and services Proportion of new ideas that reach concept design Number of new customers/segments/sectors from new products and services |
Sales revenues: Willingness to pay for new customers |