Chapter 4: Measuring the Success of Strategic Initiatives

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Measuring Information Technology's Success

  • Key performance indicator - 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

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
Benchmarking - Base lining 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 to optimal system performance (benchmark values) and identifying steps and procedures to improve system performance


THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS
  • Security is and 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)

EFFICIENCY IT METRICS - Common types of efficiency IT metrics:

Efficiency IT Metrics
Throughput
The amount of information that can travel through a system at any point.
Transaction speed
The amount of time a system takes to perform a transaction.
System availability
The number of hours at system is available for users.
Information accuracy
The extent to which a system generates the correct results when executing the same transaction numerous times.
Web traffic
Includes a host of benchmarks such as the number of page views, the number of unique visitors, and the average time spent viewing a web page.
Response time
The time it takes to respond to user interactions such as a mouse click.


EFFECTIVENESS IT METRICS - Effectiveness IT metrics focus on an organizations goals, strategies and objectives and include:

Effectiveness IT Metrics
Usability
The ease with which people perform transactions and/or find information. A popular usability metric on the Internet is degrees of freedom, which measures the number of clicks required to find desired information.
Customers satisfaction
Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained, and increases in revenue dollars per customer.
Conversion rates
The number of customers an organization “touches” for the first time and persuades to purchase its products or services. This is a popular metric for evaluating the effectiveness of banner, pop-up, and pop-under ads on the Internet.
Financial
Such as return on investment (the earning power of an organization’s assets), cost-benefit analysis (the comparison of projected revenues and costs including development, maintenance, fixed and variable), and break-even analysis (the point at which content revenues equal ongoing costs).


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) mterics
  • Enterprise Resource Planning (ERP) metrics

Website Metrics

 Supply Chain Management
 Customer Relationship Management Metrics

BRP AND ERP METRICS
The balanced scoreboard enables organizations to measure and manage strategic initiatives.



The End of Chapter 4: Measuring the Success of Strategic Initiatives by syahirahzfri. 
Thank you for reading :)


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