chapter 4:Measuring the Success of Strategic Initiatives

Measuring Information Technology’s Success:

What is the function of key performance indicator?
-it is to measures that are tied to business drivers

Metrics are detailed measures that feed KPIs

Performance metrics fall into the nebulous area of business intelligence that is neither technology, nor business centered, but requires input from both IT and business professionals

BPR AND ERP METRICS

The balanced scorecard enables organizations to measure and manage strategic initiatives



EFFICIENCY AND EFFECTIVENESS

Efficiency IT metric – measures the performance of the IT system itself including throughput, speed, and availability

Effectiveness IT metric – measures the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases

BENCMARKING- BASELINING METRICS

Regardless of what is measured, how it is measured, and whether it is for the sake of efficiency or effectiveness, there must be benchmarks – baseline values the system seeks to attain

Benchmarking – a process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance

-The Interrelationships of Efficiency and Effectiveness IT Metrics

Efficiency IT metrics focus on technology and include:
Throughput
Transaction speed
System availability
Information accuracy
Web traffic
Response time

Effectiveness IT metrics focus on an organization’s goals, strategies, and objectives and include:
Usability
Customer satisfaction
Conversion rates
Financial

Security is an issue for any organization offering products or services over the Internet

It is inefficient for an organization to implement Internet security, since it slows down processing
However, to be effective it must implement Internet security
Secure Internet connections must offer encryption and Secure Sockets Layers (SSL denoted by the lock symbol in the lower right corner of a browser)

-Metrics for Strategic Initiatives

Metrics for measuring and managing strategic initiatives include:
Web site metrics
Supply chain management (SCM) metrics
Customer relationship management (CRM) metrics
Business process reengineering (BPR) metrics
Enterprise resource planning (ERP) metrics

WEB SITE METRICS

Web site metrics include:
Abandoned registrations
Abandoned shopping cards
Click-through
Conversion rate
Cost-per-thousand
Page exposures
Total hits
Unique visitors

SUPPLY CHAIN MANAGEMENT METRICS

Back order
Customer order promised cycle time
Customer order actual cycle time
Inventory replenishment cycle time
Inventory turns (inventory turnover)

CUSTOMER RELATIONSHIP MANAGEMENT METRICS

Customer relationship management metrics measure user satisfaction and interaction and include
Sales metrics
Service metrics
Marketing metrics