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MGT300 - Chapter 4: 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 (KPI) - the measure that are tied to business drivers. Metrics are the detailed measures that feed those KPI.

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.
  • Effectiveness focuses on how well an organization is achieving its goals and objectives.
  • Efficiency focuses on the extent to which an organization is using its resources in an optimal way.

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.

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

Common types of efficiency IT metric;
  • 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 number 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 times.
  • 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 time it takes to respond to user interactions such as a mouse click.

Common types of effectiveness IT metrics
  • 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).

Metrics For Strategic Initiatives
A metric is nothing more than a standard measure to assess performance in particular area. This following metrics will help manager measure and manage their strategic initiatives : 

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 :

Supply Chain Management (CRM) Metrics
  •  Help an organization understand how it’s operating over a given period.
  • Common supply chain management metrics

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 Re engineering (BPR) and Enterprise Resource Planning (ERP) Metrics

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.


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