CHAPTER 4

CHAPTER 4

MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

COMPUTER LAB

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i'm fathi and today i would like to share with you guys about chapter 4 in subject MGT 300.In this chapter you can understand how to success and make plan strategic for business.

MEASURING INFORMATION TECHNOLOGY'S SUCCESS

1. Key performance indicator – measures that are tied to business drivers
2. Metrics are detailed measures that feed KPIs 
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 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

Bench-marking – Base lining 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

Bench marking – 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

Efficiency IT metrics focus on technology and include:

• Throughput
• Transaction speed
• System availability
• Information accuracy
• Web traffic
• Response time

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