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
EFFICIENCY AND EFFECTIVENESS
· Efficiency IT
metric – measure the performance of the IT system itself including throughout
speed and availability
· Effectiveness IT
metric – measures the impact IT has on business processes and activities
including customers satisfaction conversion rates and self-through increases
BENCHMARKING – BASELINING METRICS
· Regardless
or what is measured, how it is measured and whether it is for the sake of
efficiency or effectiveness, there must be benchmarks – beseline values the
system seek to attain
· Benchmarking – a
process of continuously measuring system results, comparing those results to
optimal system performance and identifying to improve system performance
THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS
·Efficiency IT metrics focus on technology and include :
* Throughput - the amount of information that can
travel trough 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
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 numbers 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).
·
Security is an issue for any organization offering products or services over
the Internet.
·
It is inefficient for an organization to implement Internet security, since it
slows down processing
* However, to be
effective it must implement Internet security
* Secure Internet
connections must offer encryption and Secure Sockets Layers (SSL denoted by the
lock symbol in the lower corner of a browser) .
· Web Site Metrics:
* 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 abandon the activity before paying
for the merchandise.
* Click-through – people who visit a site, click
on an ad, and are taken to the site of the advertiser.
* Conversion rate – potential customers who visit
a site and actually buy something.
* Cost-per-thousand (CPM) –
sales dollar 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
exposure to an individual visitor.
* Total hits – number of visits to a web
site, many of which may be by the same visitor.
* Unique visitor – 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 site.
SUPPLY CHAIN MANAGEMENT
METRICS
* Back order – an
unfilled customer order.
* Customer order
promised cycle time – the anticipated or agreed upon cycle time of a purchase
order.
* Customer order
actual cycle time – to actually fill a customer’s purchase order.
* 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.
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