Measuring the Success of Strategic Initiatives

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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 & business professionals

Efficiency & Effectiveness

Efficiency IT metric - measures the performance of the IT system itself including throughput, speed & availability

  • 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 & the average time spent viewing a Web page
  • Response time - the time it takes to respond to user interactions such as a mouse click
 Effectiveness IT metric - measures the impact IT has on business processes & activities including customer satisfaction, conversion rates & sell-through increases
  • 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 customer retained & increases inrevenue dollars per customer
  • Conversion rates - the number of customers an organization 'touches" for the first & persuades to purchase its products/services. This is a popular metric for evaluating the effectiveness of banner, pop-up & 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 & costs including development, maintenance, fixed & variable) & break-even analysis (the point at which constant revenues equal ongoing costs)
Metrics for Strategic Initiatives

Web site metrics
  • Abandoned registrations - number of visitors who start the process of completing a registration page & then abandon the activity
  • Abandoned shopping cards - number of visitors who create a shopping cart & start shopping & then abandon the activity before paying for the merchandise
  • cost-per-thousand - 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 an individual visitor
  • conversion rate - percentage of potential customers who visit a site & actually buy something
  • click-through - count of the number of people who visit a site, click on an ad & are taken to the site of the advertiser
  • total hits - number of visits to a Web site, 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 popular Web sites

SCM Metrics 
  • Pre oder/ Back order - an unfilled customer order
  • Customer order promised cycle time - the anticipated or agree upon cycle time of a purchase order. It is a gap between the purchase order creation date & the requested delivery date.
  • Customer order actual cycle time - the average time it takes to actually fill a customer's purchase order. This measure can viewed on an order or an order line level
  • Inventory replenishment cycle time - measure of the manufacturing cycle time plus the time included to deploy the product to the appropriate distribution center
  • Inventory turns (inventory turnover) - the number of times that a company's inventory cycles or turns over per year. It is one of the most commonly used supply chain metrics

Muhammad Imran


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