- Key performance indicator - measures that are tied to business drivers.
- Metrics are detailed measures that feed KPIs.
Efficiency and Effectiveness
- Efficiency IT metric - measures the performance of the IT system itself including throughput, speed, and availability.
- Effectiveness IT metric - measures the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases.
Benchmarking - Base Lining Metrics
- A process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance.
Efficiency IT Metrics
- Efficiency IT metrics focus on technology and include:
- 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, 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
- 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 if freedom, which measures the number 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.
- Financial - such as return on investment, cost-benefit analysis, and break-even analysis.
The Interrelationships of Efficiency and Effectiveness IT Metrics
- 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.
- Interrelationship between efficiency and effectiveness:
Metrics for Strategic Initiatives
- For measuring and managing strategic initiatives include:
- Web Site Metrics:
- Abandoned registrations
- Abandoned shopping cards
- Click-through
- Conversion rate
- Cost-per-thousand
- Page exposures
- Total hits
- Unique visitors
- Supply Chain Management Metrics:
- Back order
- Customer order promised cycle time
- Customer order actual cycle time
- Inventory replenishment cycle time
- Inventory turns (inventory turnover)
- Customer Relationship Management Metrics:
- Sales metrics
- Service metrics
- Marketing metrics
- Business Process Re-engineering (BPR) and Enterprise Resource Planning (ERP) Metrics:
- The balanced scorecard enables organizations to measure and manage strategic initiatives.
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