UNIT 1 : CHAPTER 4

Chapter 4: Measuring the Success of Strategic Initiatives

PROJECT means temporary activity a company undertakes to create a unique product, service or result. METRICS are measurements that evaluate result to determine whether a project is meeting its goals. Two core metric is:

a.   Critical Success Factors (CFSs)
    Crucial steps companies perform to achieve their goals and objectives and implement their       

    strategies.

b.  Key Performance Indicators (KPIs)

    Quantifiable metrics company uses to evaluate progress toward critical success factor and it is far more specific than CFSs.

Efficiency and Effectiveness

Efficiency IT metric is measures the performance of the IT system itself including throughput, speed, and availability while Effectiveness IT metric is measures the impact IT has on business processes and activities including customer satisfaction.

Benchmarking-baselining metrics

Benchmarks means baseline values the system seeks to attain while benchmarking means a process of continuously measuring system results, comparing those result to optimal system performance, and identifying steps and procedures to improve system performance.

Efficiency IT metrics

Throughput                  -   

The amount of information that can travel through a system at any point.

Transaction speed        -   The amount of time a system takes too perform a transaction.

System availability      -   The number of hours a system is available for users.

Information accuracy   -   Extent to which system generates the correct results when executing the                                                 same transaction numerous times.

 Web traffic                   -   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             -   Time taken to respond to user interactions such as a mouse click.

Effectiveness IT metrics

Usability                           -        People perform transaction to find information which measures the                                                        number of clicks required to find desired information.

Customer satisfaction       -        Using survey to get customer satisfaction, percentage of existing                                                            customers retained, and increases in revenue dollars per customer.

Conversion rates               -        Popular metric for evaluating the effectiveness of banner, pop-up and                                                    pop-under ads on the internet.

Financial                           -        Return on investment, cost-projected revenues and costs including                                                        development, maintenance, fixed and break-even analysis.

Interrelationships of efficiency and effectiveness IT metrics

Security was an issues for any company offering products or service on internet. Its implement internet security, since it slows down processing.

Metrics for strategic initiatives

·         1. Web site metrics

ü    Abandoned registrations

ü      Abandoned shopping cards

ü      Click-through

ü      Conversion rate

ü      Cost-per-thousand

ü       Page exposures

ü      Total hits

ü       Unique visitors

·      2.    SCM metrics

ü      Back order

ü      Customer order promised cycle time

ü  Customer order actual cycle time

ü       Inventory replenishment cycle time

ü       Inventory turns

·       3.   CRM metrics

ü  Sales metrics

ü  Service metrics

ü  Marketing metrics

·      4.   BPR metrics

·     5.   ERP metrics

BPR and ERP metrics

The balance scorecard enables organizations o measure and manage strategic initiatives. By using the same metrics, will measures HR organization to see the success of organizations. Four points of measures activities:

•   Learning and goal perspective
•   Business process perspective
•  Customer perspective
• Financial perspective