Chapter 4 - Measuring the Success of Strategic Initiatives

        Measuring information technology’s succes

• Key performance indicator  are measures that are tied to business drivers.
•  Metrics are detailed measures that feed KPIs such as performance achievement.
• 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 (doing the things right) - measures the performance of the IT system itself including throughput, speed and availability. The means for throughput at here is a how many information that can we collected or saved in system that we used.
•     Effectiveness IT metric (doing the right things) - measures the impact IT has on business processes and activities including customers satisfaction, conversion rates, and sell through increases. The impact is a how long we can see customer satisfy with our services.

     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. For example, our target to achieve for subject MGT 300 and make a different on target for test 1 and test 2.

   

       - Definition for benchmarking is a process of continuously measuring system results, comparing those results to optimal system performance (benchmarks values), and identifying steps and procedures to improve systems performance. For example, to achieve our target we must study smart to get what we want for subject MGT 300 such as if we failed in quiz 1 so that we must study to get higher marks in quiz 2.

      The interrelationship of efficiency and effectiveness it                                            metrics

    

   Efficiency :

     ~  Throughput is the amount of information that can travel through a system at any point. How many we can save and collect the information in system. For example, to save the amount of students in UITM.

    ~ Transaction speed is the amount of time a system takes to perform a transaction. For example, when we serve something to get information slow or fast that particular loading.

    

   ~ System availability is the number of hours system is available for uses. For example long time ago      Maybank cannot used their transaction at o’clock 12.00 until up but now their transaction already we can  used.

    ~ Information accuracy is 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 view, the number of unique visitors  and the average time spent viewing a web page. For example, how many people follow or see our blog.

    ~ Response time is the time it takes to respond to user interactions such as a mouse click. Such as when we   want to find a it business in internet we must wait and open many pages.

Effectiveness

~ Usability is the ease with which people perform transactions and find information. A popular usability metric on the internet is degrees of freedom, which measure the number of clicks required to find desired information. For example how many we click the button when we want to see the examination results.

    ~ Customer’s satisfaction is measured by such benchmarks as satisfaction surveys, percentages of existing customers retained, and increases in revenue dollars per customers. For example when we sell the product through online.

   ~ Conversion rates is 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. For example, me for the first time see and view the web page in facebook and then have one advertisement sell the product and interested me and then I straight to buy that particular item in the web pages.

      

   ~ Financial such as return on investment, cost-benefits analysis and break-even analysis. For example, how many we can get the profit when sell our product.

Metrics for strategic initiatives

        Web sites metrics :

          

                  i. Abandoned registrations are the number of visitors who start the process of completing a registration page and then abandon the activity. For example, when we enter one web site we must sign up first before us in and use the web sites.

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

                 iii. Click-through is a count of the number of people who visit a site, click on an ad and are taken to the site of the advertise. For example, we open facebook and then we see one advertisement and then we straight click the page.

                  iv. Conversion rate is the percentages of potential customers who visit a site and actually buy something. For example, after we click the page from facebook we straight to buy something from that page.

              v. Cost-per-thousand(CPM) is the sales dollars generated per dollar of advertising. This is commonly used to make the case for spending money to appear on a search engine.

                    vi. Page exposures are the average number of pages exposures to an individual visitor.

                    vii. Total hits are the number visits to a web site, many of which may be by the same visitor.

                  viii. Unique visitors are the number of unique visitors to a site in a given time. This is commonly used by Nielsen rating to rank the most popular Web Sites.

Supply chain management metrics:

                                

 i.  Back order such as have a customer sees our web sites but not have any properties over there.

 ii. Customer order promised cycle time such as customers already but our product but the product not have and the supplier promised that the properties will coming after 2 days from today.

 iii. Customer order actual cycle time such as those properties customer buy from supplier safely arrived in customer hand.

 iv. Inventory replenishment cycle time such as how long production department will used their time to produce that items.

  v.  Inventory turns such as how many suppliers produce their product for sell those items to the customers I one year.

  Customer relationship management metrics :

                             

    i. Sales metrics such as number of prospective customers, number of new customers, number of retained customers, no. of open leads, no. of sales calls

   ii. Service metrics such as cases closed same day, customer satisfaction level, average time to resolution, no. of services calls, percentages of services renewals.

   iii. Marketing metrics such as new customer retention rates, no. of marketing campaign, no. of new leads by product, customers retention rate

    BPR and ERP metrics :

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