FishaMiskiman_MGT300: CHAPTER 4 : Measuring the Success of Strategic Initiatives

1. Learning outcomes

1.1 Compare efficiency IT metrics and effectiveness IT metrics
1.2 List and describe five common types of efficiency IT metrics
1.3 List and describe four types of effectiveness IT metrics
1.4 Explain customer metrics and their important to an organization

2. Measuring Information Technology's Success

2.1 Key performance indicator - measure that are tied to business drivers
2.2 Metrics are detailed measure that feed KPIs
2.3 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 professional
4M : i. Money
ii. Man
iii. Material
iv. Machine

3. Efficiency and Effectiveness

3.1 Efficiency IT metric - measures the performance of the IT system itself including throughput, speed, and availability
'' Doing things right''

3.2 Efficiency IT metric 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 available - 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.

3.3 Effectiveness IT Metrics - measure the impact IT has on business processing and activities including customer satisfaction, conversion rates, and sell-through increases.

'' Doing the right things ''

3.4 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. A popular usability metric on the Internet is degrees of freedom, which measures the number of clicks required to find desired information. Easy to enter to our website.
Customer satisfaction - Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained, and increases in revenue dollars per customer.
Conversion rates - Th 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. Conversation with customer to buy our product.
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 constant revenues equal ongoing costs).

3.5 The Interrelationship of Efficiency and Effectiveness IT Metrics

Security is an issues for any organization offering products or services over the Internet. When we use security in our system, the system can be slower.
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)
It can be slow because have a security and effectiveness but customer feeling happy because all information can be more safely.

4. Benchmarking - Baselining Metrics

4.1 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.

It means a level that should be achieved.

4.2 ~~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. (make improvements)

5. Metrics for Strategic Initiatives

5.1 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

5.2 Web Site Metrics include :

Abandoned registrations - Number of visitors who start the process of completing a registration page and he 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 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. this is commonly used to make the case for spending money to appear on a search engine.
Page exposures - Average number of page exposures to an individual visitor.
Total hits - Number of visitor to a Web site, many of which may be by the same visitor.
Unique visitors - Number of unique visitors to a site in a given time. this is commonly used by Nielsen/Net ratings to rank the most popular Web sites.