Chapter 4 : Measuring The Success of Strategic Initiatives

MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

• Key performances indicator - measure that are tied to business drivers.
• Metrics are detailed mesures that feed KPIs
• Performances metrics fall into the business intilligence that is neither technology, nor business centered , but requires input from both IT and business professionals.

EFFICIENCY AND EFFECTIVENESS

• Efficiency IT metric - measures the performances of the IT system itself including throughput, speed, and availability.
• Effectiveness IT metric - mesures the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increase.

BENCHMARKING- BASE LINE METRICS

• Benchmarking - a process of continously measuring systems results, comparing those results to optimal systems performances, and identfying steps and procedures to improve system performance.

BENCHMARKING - BASELINING METRICS

• E-government bencmarking

EFFICIENCY IT METRICS

1. Efficiency IT metrics 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 availability - the numbers 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 time

• 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 times it takes to response to user interactions such as a mouse click.

EFFECTIVENESS IT METRICS

1. 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.
• Customer satisfaction - measured by such benchmarks as satisfaction surveys , percentage of existing customers retained, and increases in revenue dollars per customers.

• 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.

• Financial - such as return to investment, cost-benefit analysis.

THE INTERRELATIONSHIP OF EFFICIENCY AND EFFECTIVENESS IT METRICS

METRICS FOR STRATEGICS INITIATIVES

1. Metrics for measuring and managing strategis initiative include :

• Web site metric  

              - website metric include:

                      *Abandoned registrations - 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 and then abandone 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.

                      *Conversion rate - percentage of potiential customers who visit a site and acctually 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 individual visitors.

                     *Total hits - number of visit to a website, 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 populat web sites.

• Supply chain management (SCM) metrics

                     *Back order - an unfilled customers order .A back order is demand 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 take 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
                                                                                   included to deploy the product to the appropriate
                                                                                   distribution center.
                     *Inventory turns ( inventory turnover) - the number of time that a company's inventory
                                                                                     cycle or turns over per year. It is one of the
                                                                                     commonly used supply chain metrics.

• Customer relationship management (CRM) metrics.

                      *Sales metrics

                      *Service metrics

                      *Marketing metrics

• Business process reengineering (BPR) mterics & Enterpraise Resources Planning