How to measure ROI on digital transformation

Digital transformation is no longer just a buzzword—it’s a vital part of staying competitive in today’s fast-moving world. But while many businesses are investing in new technologies, not all of them are clear on how to measure whether those investments are actually paying off.

So, how do you measure the return on investment (ROI) of digital transformation in a way that’s meaningful, realistic, and tailored to your business?

Let’s break it down—with some real examples from Shoothill, a UK-based software development company that’s been helping organisations transform digitally for over 15 years.

Start with clear goals

Before you can measure ROI, you need to know what you’re aiming for. Are you trying to:

• Save time or money?
• Improve customer experience?
• Increase sales or leads?
• Make better use of data?

For example, Sharmans, a leading manufacturer of commercial guttering systems, worked with Shoothill to digitise their site inspection and reporting process. Their goal was to reduce paperwork, speed up reporting, and improve accuracy. That’s a clear, measurable objective.

Understand the costs

Next, calculate the total investment. This includes:

• Software development or licensing
• Hardware or infrastructure
• Staff training
• Ongoing support and maintenance

In the case of Water Plus, the UK’s largest water retailer, Shoothill developed a bespoke customer portal to streamline account management. While the upfront cost of building a custom system was significant, it replaced inefficient manual processes and reduced the burden on customer service teams—leading to long-term savings.

Measure tangible benefits

These are the benefits you can put a number on:

• Time saved (e.g. fewer hours spent on admin)
• Cost reductions (e.g. less paper, fewer errors)
• Revenue growth (e.g. more online sales or leads)

With Housebuilder Pro, Shoothill created a full digital platform for managing new home sales—from reservation to completion. The system helped housebuilders reduce delays, improve communication with buyers, and keep everything in one place. That translates into faster sales cycles and fewer costly mistakes.

Don’t ignore the intangibles

Some benefits are harder to measure but just as important:

• Better customer satisfaction
• Improved staff morale
• Stronger brand reputation
• Greater agility and innovation

For instance, Sharmans’ digital reporting tool didn’t just save time—it also impressed clients with its professionalism and clarity, helping to strengthen relationships and win repeat business.

How to work out ROI in simple terms

To measure the return on investment (ROI) of a digital transformation project, you’re basically comparing what you gained to what you spent.

Here’s the basic idea:

ROI = (Total Benefits – Total Costs) ÷ Total Costs

Then multiply the result by 100 to get a percentage.

Example:

Let’s say you spent £50,000 on a new digital system, and over two years it helped you save or earn £75,000.

• Total Benefits = £75,000
• Total Costs = £50,000
• ROI = (£75,000 – £50,000) ÷ £50,000 = £25,000 ÷ £50,000 = 0.5
• ROI = 0.5 × 100 = 50%

So, your ROI is 50%, meaning you gained half as much again as you spent.

Track progress over time

Digital transformation isn’t a one-off project—it’s an ongoing journey. Use dashboards, analytics tools, and regular reviews to track how things are going. Are you hitting your KPIs? Are staff using the new tools? Are customers noticing a difference?

Shoothill’s clients often start with one digital solution and expand from there, building on early wins to drive further innovation.

Measuring ROI on digital transformation doesn’t have to be complicated. Start with clear goals, track both the numbers and the softer benefits, and keep reviewing your progress.

Shoothill’s work with companies like Sharmans, Water Plus, and Housebuilder Pro shows that when done right, digital transformation can deliver real, measurable value—whether that’s in pounds saved, hours gained, or happier customers.