CHAPTER 4 : MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

Key Performance Indicator

• Measures that are tied to business drivers. Every year, all company will target their KPI.
• Metrics are detailed measures that feed KPIs.
• 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

   

 Efficiency IT metric

• measures the performance of the IT system itself including throughput, speed, and availability.
• lots of useful information.

Effectiveness IT metric

• measure the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases.
• the extent to which our services are preferred by many customers.

 

 

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.

• 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)

 EXAMPLE :

• United states
• although highest efficiency, the effectiveness lowest because they think can do system more sophisticated. (feeling not happy)

• Canada
• although lowest efficiency, the effectiveness is highest because they grateful and satisfied. (feeling happy)

THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS

•  Throughput
• want serve result for last semester, just open student portal, straight can look.

• Transaction speed
• System availability
• May bank 2 U, before this cannot do transaction at 2am, but now can do anytime 24 hours.

• Information accurancy
• financial system that involves a lot of numbers. after the key in, to check them, can continue to open the system and its figures will be the same as what is key in.

• Web traffic
• blog

• Response time
• want to get the information, get respond be time. good because once time open, straight get the information. 

•  Usability
• just click, keep out

• Customer satisfaction
• Conservation rates
• went go to this pages, the customer continues to be a member.

• Financial
• the profit increase. 

 

• 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.

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

include :

1. Abandoned registrations  - number of visitors who start the process of completing a registration page and then abandon the activity.
2. Abandoned shopping cards - number of visitors who create a shopping cart and start shopping and then abandon the activity before paying for the merchandise.
3. 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.
4. Conversion rate - percentage of potential customers who visit a site and actually buy something.
5. 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.
6. Page exposures - average number of page exposures to an individual visitor.
7. Total hits - number of visits to a Web site, many of which may be by the same visitor.
8. 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.

•  back orde
• want to order goods, but the goods not enough.
• are ready to pay, but the item is not ready yet.

• customer order promised cycle time
• customer comes, no goods. so, for the first, order. promise will sent the goods a week from now.

• customer order actual cycle time
• the goods arrive right in the hands of customers.

• inventory replenishment cycle time
• goods are to be in the process. so, how long will it take to complete the items?

• inventory turns (inventory turnover)
• within a year, the company will update existing stock back five or six times since the company developed.

 

 Customer relationship management metrics measure user satisfaction and interaction and include :

• Sales metrics
• Service metrics
• Marketing metrics

  

BPR AND ERP METRICS

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