CHAPTER 4 : MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

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 nebulous area of business intelligence that is neither technology, nor business centered, but requires input from bot IT and business professionals

Efficiency and Effectiveness 

-Efficiency IT metrics – measures the performance of It system itself including throughput, speed, and availability

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

Benchmarking

 E-government benchmarks

-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

Efficiency IT Metrics

Focus on technology and include :

-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 a 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

 Focus on an organization’s goals, strategies, and objectives and include:

-Usability – The ease with which people perform transactions and/or find information.

-Customer Satisfaction – Measures by such benchmarks as satisfaction surveys, percentage of existing customers retained.

-Conversion rates – the number of customers an organization “touches ‘’ for the first time and convinces to purchase products or services.

-Financial metrics – such as return on investment , cost benefit analysis, etc.

Interrelationship between efficiency and effectiveness

Web Site Metrics

-Abandoned registrations – number of visitor who start the process of completing a registration page and then abandon the activity.

-Abandoned shopping carts – number of visitors who create a shopping cart and start shopping and then abandon the activity before paying for the merchandise.

-Click Through – count of the number of people who visit a site, click on an ad, and are taken  to the site of the advertiser.

-Conversion Rate – Percentage of potential customers who visit a site and actually buy something.

-Cost per thousand (CPM) – Sales dollars generated per dollar of advertising.

-Page exposures – Average number of page exposure to an individual visitor.

-Total hits – Number of visits to a web site, many of which may be by the same visitor.

-Unique visitor – Number of unique visitors to a site in a given time.

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