MIS Ch4 ITMetrics

MANAGEMENT

INFORMATION SYSTEMS

Chapter 4: Measuring the Success of Strategic Initiatives + BP4

Learning Outcomes

Define metrics and describe the relationship between efficiency IT metrics and effectiveness IT metrics.

Explain why a business would use metrics to measure the success of strategic initiatives.

Explain the three components of an enterprise architecture.

List and describe the five qualities of an infrastructure architecture.

Compare Web services and open systems.

Rankings

Henry Luce founded Time magazine in 1923 and Fortune magazine in 1929

The Fortune 500 = ranking of Americas top 500 companies, serves as the corporate benchmark

BusinessWeek magazine created a similar biannual ranking (now with Bloomberg)

Top business schools

Student experience (45%): how graduating students rated their education

Employer assessment (45%): how recruiters at companies that hire MBAs judge each schools graduates

Intellectual capital (10%): expertise of each schools faculty, determined by a tally of research articles in esteemed journals

KPIs Class Activity

1-3: AUBG

4-6: KFC

7-9: Walmart

10-12: Toyota

13-15: City of Blagoevgrad

16-18: Zara

19-21: Lufthansa

22-24: Department of Public

Transportation, Sofia

25-27: JFK Airport (NYC)

28-30: AUBG Canteen

31-33: Sheraton Hotels

34-36: OK Taxi

Do not focus on legally required financial reporting metrics

Measuring Efficiency and Effectiveness Class Activity

Create a plan to measure the efficiency and effectiveness

of this course and recommendations on how they would

improve the course to make it more efficient and more

effective

You will need to determine ways to benchmark current

efficiency and effectiveness and ways to continuously

monitor and measure against the benchmarks to

determine if the course is becoming more or less efficient

and effective

Measuring Efficiency and Effectiveness Class Activity

Design of the classroom

Room temperature and lighting

Electronic capabilities of the classroom

Technology available in the classroom

Length of class

Email and instant messaging

Students attendance

Students preparation

Students arrival time

Quizzes and exams (frequency, length, grades)

Measuring ITs Success

Questions banking executives raise regarding their IT systems:

Is the internal IT operation performing satisfactorily?

Should the company outsource some or all of the IT

operations?

How is the outsourcing company performing?

What are the risk factors to consider in an IT project?

What questions should be asked to ensure an IT project

proposal is realistic?

Which factors are most critical to measure to ensure the

project achieves success?

How would you define success in relation to an IT system?

Is it more important to have IT professionals or business

professional define success for an IT system?

What happens if only one group defines success?

Key Performance Indicators (KPIs)

Measures that are tied to business drivers

Metrics are detailed measures that feed KPIs

Performance metrics require input from both IT and

business professionals

Efficiency IT Metrics

Measure performance of IT system itself

Focus on technology

Doing things right

Information accuracy

Web traffic

Response time

Throughput

Transaction speed

System availability

How do you measure customer satisfaction?

Effectiveness IT Metrics

Measure impact IT has on business processes & activities

Focus on organizations goals, strategies, and objectives

Doing the right things

Conversion rates

Financial

Usability

Customer satisfaction

Benchmarking Baseline Metrics

Benchmarks

Baseline values the system seeks to attain

Benchmarking

Process of continuously measuring system results

Comparing those results to optimal system performance

(benchmark values)

Identifying steps and procedures to improve system

performance

Efficiency and Effectiveness IT Metrics

Benchmarking Baseline Metrics E-Government Benchmarks

Benchmarking Baseline Metrics E-Government Benchmarks

E-government efficiency metrics

Number of computers per 100 citizens

Number of Internet hosts per 10,000 citizens

Percentage of the citizen population online

E-government effectiveness metrics

CRM practices

Customer-service vision

Approaches to offering e-government services through

multiple-service delivery channels

Initiatives for identifying services for individual citizen

segments

Metrics for Strategic Initiatives

Metric = standard measure to assess performance in a

particular area

Metrics for measuring and managing strategic initiatives:

Website metrics

Supply chain management (SCM) metrics

Customer relationship management (CRM) metrics

Business process reengineering (BPR) metrics

Enterprise resource planning (ERP) metrics

Website Metrics

Abandoned registrations

Abandoned shopping carts

Click-through

Conversion rate

Cost-per-thousand

Page exposures

Total hits

Unique visitors

Supply Chain Metrics

Back order

Customer order

promised cycle time

Customer order actual

cycle time

Inventory replenishment

cycle time

Inventory turns

(inventory turnover)

CRM Metrics

Sales metrics

# of prospective customers

# of new customers

# of retained customers

# of open leads

# of sales calls

# of sales call per lead

Amount of new revenue

Amount of recurring revenue

# of proposals given

Service metrics

Cases closed same day

# of cases handled by agent

# of service calls

Average # of service requests by type

Average time to resolution

Average # of service calls per day

% compliance with service-level agreement

% of service renewals

Customer satisfaction level

Marketing metrics

# of marketing campaigns

New customer retention rates

# of responses by marketing campaign

# of purchases by marketing campaign

Revenue generated by marketing campaign

Cost per interaction by marketing campaign

# of new customers acquired by marketing campaign

Customer retention rate

# of new leads by product

Measure user satisfaction and interaction

BPR and ERP Metrics

Balanced scorecard = enables organizations to measure

and manage strategic initiatives

Balanced scorecard views organization from 4 perspectives:

Learning and growth

Internal business process

Customer

Financial

Balanced Scorecard

9 Steps to Success TM Step 1: Assessment Internal and External Strategic Assessment

Step 2: Strategy Customer Value, Strategic Themes & Results

Step 3: Objectives Strategy Action Components

Step 4: Strategy Map Cause-Effect Links

Step 5: Performance Measures Measures & Targets

Step 6: Initiatives Strategic Projects

Step 7: Performance Analysis Software, Performance Reporting & Analysis

Step 8: Alignment Cascading to Unit and Individual Scorecards

Step 9: Evaluation Strategy Results and Revised Strategies

Balance Scorecard Video: QuickScore Performance Information System
http://vimeo.com/71104616http://vimeo.com/71104616http://vimeo.com/71104616http://vimeo.com/71104616http://vimeo.com/71104616http://vimeo.com/71104616

Oracle

Business Intelligence Enterprise Edition

Enterprise Architecture

Enterprise architecture = plans for how organization will

build, deploy, use, and share its data, processes, and IT

assets

Enterprise architect = person grounded in technology,

fluent in business, provides the important bridge

between IT and business

Enterprise Architecture

Documents

MIS Ch4 ITMetrics