#4 ; MEASURING THE SUCCESS OF STRATIGIC INITIATIVE

MEASURING INFORMATION TECHNOLOGY’S SUCCESS

ᴥ        Key performance indicator – measures that are tied to
 business drivers.

ᴥ        Metrics are detailed measures that feed KPIs.

ᴥ        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 –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

The Interrelationships of Efficiency and Effectiveness IT Metrics

•Effectiveness IT metrics focus on an organization’s
goals, strategies, and objectives and include:

– Usability

– Customer satisfaction

– Conversion rates

– Financial

The Interrelationships of Efficiency and Effectiveness IT Metrics

§  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

BPR AND ERP METRICS

•The balanced scorecard enables organizations to measure
and manage strategic initiatives