CHAPTER FOUR - MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

Measuring Information Technology’s  Success

It has become an important part of organizations’ strategy, competitive advantage, and profitability.

Key Performance Indicators (KPIs) are the measure that are tied to business drivers. Metrics are the detailed measures that feed those KPIs.

Efficiency And Effectiveness

Efficiency IT metrics measure the performance of the IT system itself including throughput, speed, and availability.

Effectiveness IT metrics measure the impact IT has on business process and activities including customer satisfaction, conversation rates, and self-through increase.

Benchmarking – Baseline Metrics

Benchmarking is 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.

 

 Comparing efficiency IT and effectiveness IT metrics of Egovernment initiatives.

The Interrelationships Of Efficiency And Effectiveness IT Metrics

Efficiency IT metrics focus on the technology itself. It’s important to monitor and do not always guaranteed effectiveness.

Effectiveness IT metrics are determined according to an organization’s  goals, strategies, and objectives.

Need to consider the issue of security while determining efficiency and effectiveness IT metrics.

When an organization offers customers the ability to purchase products over the internet it must implement the appropriate security.

Metrics For Strategic Initiatives

A metric is nothing more than a standard measure to assess performance in particular area. A focus on customer and performance standard shows up in the form of metrics that assess the ability to meet customer’s needs and business objectives.

Website Metrics

-          A company can use web traffic analysis to determine the revenue generated, the number of new customers acquired, any reductions in customer service call and so on.

A few metrics manager should be familiar with to help measure website access along with organization’s strategic initiatives are :

-          Abandoned Registrations

-          Abandoned Shopping Carts

-          Click-through

-          Conversation Rate

-          Cost-Per-Thousand(CPM)

-          Page exposure

-          Total Hits

-          Unique Visitors   

Supply Chain Management (CRM) Metrics

-          Help an organization understand how it’s operating over a given period.

Common supply chain management metrics:

1.       Back order

2.       Customer order promised cycle time

3.       Customer order actual cycle time

4.       Inventory replenishment cycle time

5.       Inventory turns

Customer Relationship Management (CRM) Metrics

-          Best practice is no more than seven (plus or minus two) metrics out of hundreds possible should be used at any given management level.

Business Process Reengineering (BPR) and Enterprise Resource Planning (ERP) Metrics

-          BPR and ERP are large, organization wide initiatiaves.

-          It is extremely difficult to measure

-          One of the best method is scorecard    

Balance Scorecard

-          A management system, in addition to a measurement system that enables organizations to clarify their vision strategy an translate them into an action.