Chapter 4 : Measuring The Success of Strategic Initiatives

Learning Outcomes :

1. Compare efficiency IT metrics and effectiveness IT metrics
2. List and describe five common types of efficiency IT metrics
3. List and describe four types of effectiveness IT metrics 
4. Explain customer metrics and their importance to an organization

Efficiency and Effectiveness :

• Efficiency IT metric - measures the performance of the IT system itself 
• Effectiveness IT metric - measures the impact IT has on business processes and activities including 

Benchmarking - a process of continuously measuring system results, comparing those results to optimal system performance 

The Interrelationships of Efficiency and Effectiveness IT metrics

• Efficiency IT metrics focus on technology and include :

- Throughput - amount of information that can travel through a system at any point

- Transaction speed - amount of time a system takes to perform a transaction
- System availability - number of hours a system is available for users
- Information accuracy - system generates the correct results when executing the same transaction
- Web traffic - a host of benchmark such as number of page views
- Response time - time it takes to respond to user interactions such as mouse click

• Effectiveness IT metrics :

- Usability - people perform transactions and/or find information
- Customer satisfaction - measured by such benchmarks as satisfaction surveys and percentages
- Conversion rates - number of customer an organization 'touches' for the first time
- Financial - return on investment, cost benefit analysis and maintenance


Metrics for Strategic Initiatives

Metrics for measuring and managing strategic initiatives include :

1. Website metrics
2. Abandoned registrations
3. Click through
4. Conversion rate
5. Cost-per-thousand
6. Page exposures
7. Total hits
8. Unique visitors

Supply Chain Management

1. Back order
2. Customer order promised cycle time
3. Customer order actual cycle time
4. Inventory replenishment
5. Inventory turns (inventory turnover)

Customer Relationship Management Metrics

1. Sales metrics
2. Service metrics
3. Marketing metrics

BPR and ERP metrics

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