MGT 300 - Chapter 4

CHAPTER 4 - Measuring The Success of Strategic Initiative

MEASURING INFORMATION TECHNOLOGY'S SUCCESS

  • Key performance indicator - measures that are tied to business drivers
  • Metric - detailed measured that feed KPIs

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 

~ Benchmarking - a process of continuously measuring system system results, comparing those    results to optimal system performance (benchmark values), and identifying steps and procedures    to improve system performance


E-government benchmarks


EFFICIENCY IT METRICS

~ Efficiency IT metrics focus on technology and include : 
  1. Throughput - The amount of information that can travel through a system at any point
  2. Transaction speed - The amount of time a system takes to perform a transaction
  3. System availability - The number of hours a system is available for users
  4. Information accuracy - The extent to which a system generates the correct results when executing the same transaction numerous times
  5. 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
  6. 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 organization's goals, strategies, and objectives and include:
  1. Usability - The ease with which people perform transaction 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
  2. Customer satisfaction - Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained, and increases in revenue dollars per customer
  3. 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
  4. 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.)

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 organization to implement internet security, since it slows down processing
  • However, to be effective it must implement the 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 

Abandoned registration - Number of visitors 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 andthen 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

Conversation rate - Percentage of potential customers who visit a site and actually buy something

Cost-per-thousand - 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 exposure - Average number of page exposures to an individual visitor

Total hits - Number of visits 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
  • Supply chain management (SCM) metrics
Back order - An unfilled customer order. A back order is demand (immediate or past due) against an item whose current stock level is insufficient to satisfy demand

Customer order promised cycle time - The anticipated or agreed upon cycle time of a purchase order. It is a gap between the purchase order creation date and the requested delivery date

Customer order actual cycle time - The average time it takes to actually fill a customer's purchase order. This measure can be viewed on an order or an order line level

Inventory replenishment cycle time - Measure of the manufacturing cycle time plus the tie included to deploy the product to the appropriate distribution center

Inventory turns (inventory turnover) - The number of times that a company's inventory cycles or turns over per year. It is one of the most commonly used supply chain metrics
  • Customer relationship management (CRM) metrics

  • Business process reengineering (BPR) metrics
  • Enterprise resource planning (ERP) metrics





❤❤❤



Comments

Post a Comment

Popular posts from this blog

MGT 300 - Chapter 9

Image
Chapter 9 - Enabling the Organization - Decision Making                                                         DECISION MAKING ~ Reasons for the growth of decision - making information systems : People need to analyze large amounts of information People must make decisions quickly People must apply sophisticated analysis techniques, such as modeling                                     and forecasting to make good decisions. People must protect the corporate asset of organizational information    ~  Model  - A simplified representation or abstraction of reality.    ~ IT systems in an enterprise                                                                                               TRANSACTION PROCESSING SYSTEMS ~ Moving up through the organizational pyramid users move from requiring  transactional information to analytical information.                                                                                      ~  Transaction processing syste
Read more

MGT 300 - Chapter 13

Image
Chapter 13 - E-Business E-BUSINESS                 ~ The Internet is a powerful channel that presents new opportunities for an organization to : Touch customers Enrich products and services with information Reduce costs E-COMMERCE & E-BUSINESS ~ How do e-commerce and e-business differ ? ~ E-commerce - The buying and selling of goods and services over the internet (online transactions) ~ E-business - The conducting of business on the Internet including, not only buying and selling but also serving customers and collaborating with business partners (online transactions, serving customers and collaborating with business partner)                      E-BUSINESS MODELS        ~ E- Business Model  - An approach to conducting electronic business on the Internet. E - BUSINESS MODELS BUSINESS-TO-BUSINESS (B2B) ~ Electronic marketplace (e-marketplace) - Interactive business communities providing a                  central market where multiple
Read more