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CHAPTER 4 MEASURING THE SUCCESS OF STRATEGIC INITIATIVES - Coggle Diagram
CHAPTER 4
MEASURING THE SUCCESS OF STRATEGIC INITIATIVES
Measuring Information Technology’s Success
Key Performance Indicator – measures that are tied to business drivers
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 professionals
Effectiveness IT
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 customer.
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 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).
Efficiency IT
Throughput - the amount of information that can travel through a system at any point in time
Speed – the amount of time a system takes to perform a transaction
Availability - the number of hours a system is available for users
Accuracy - the extent to which a system generates correct results when executing the same transaction numerous times
Web traffic - includes number of page views, number of unique visitors, and time spent on a Web page
Response time – the time it takes to respond to user interactions such as a mouse click
Metrics for Strategic Initiatives
Web site metrics
Abandoned registrations
Abandoned shopping carts
Click-through
Conversion rate
Cost-per-thousand (CPM
Page exposures
Total hits
Unique visitors
Supply Chain Management (SCM) metrics
Back order
Customer order promised cycle time
Customer order actual cycle time
Inventory replenishment cycle time
Inventory turns (inventory turnover)
BPR and ERP metrics
The balanced scorecard enables organizations to measure and manage strategic initiatives
The balanced scorecard is a management system, (in addition to a measurement system), that enables organizations to clarify their vision and strategy and translate them into action.
Financial
"To succeed financially, how should we appear to our shareholders?"
Internal Business Processes
"To satisfy our shareholders and customers, what business processes must we excel at?"
Learning and Growth
"To achieve our vision, how will we sustain our ability to change and improve?”
Customer
"To achieve our vision, how should we appear to our customers?"
Customer Relationship Management (CRM) metrics
Marketing Metrics
Service Metrics
Sales Metrics