Business Driven Technology

Unit 1

Achieving Business Success

Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

4-2

Unit OneO Chapter 1– Business Driven Technology

O Chapter 2 – Identifying Competitive Advantages

O Chapter 3 – Strategic Initiatives for Implementing Competitive Advantages

O Chapter 4 – Measuring the Success of Strategic Initiatives

O Chapter 5– Organizational Structures that Support Strategic Initiatives

Chapter 4Measuring the Success of Strategic Initiatives

4-3

4-4

LEARNING OUTCOMES

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

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

4-5

METRICS: MEASURING SUCCESS

OProject – A temporary activity a company undertakes to create a unique product, service, or result

OMetrics – Measurements that evaluate results to determine whether a project is meeting its goals

4-6

METRICS: MEASURING SUCCESS

OCritical success factors (CSFs) – The crucial steps companies make to perform to achieve their goals and objectives and implement strategies

O Create high-quality products

O Retain competitive advantages

O Reduce product costs

O Increase customer satisfaction

O Hire and retain the best professionals

4-7

METRICS: MEASURING SUCCESS

4-8

METRICS: MEASURING SUCCESS

OKey performance indicators (KPIs) – The quantifiable metrics a company uses to evaluate progress toward critical success factors

O Turnover rates of employees

O Number of product returns

O Number of new customers

O Average customer spending

4-9

Efficiency and Effectiveness

O Efficiency MIS metric – measures the performance of the MIS system itself including throughput, speed, and availability

O Effectiveness MIS metric – measures the impact MIS has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases

4-10

Benchmarking – Baselining Metrics

O Benchmarks – baseline values the system seeks to attain

O Benchmarking – 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

4-11

The Interrelationships of Efficiency and Effectiveness

MIS MetricsO Efficiency MIS metrics focus on

technology and include:O ThroughputO Transaction speedO System availabilityO Information accuracyO Web trafficO Response time

4-12

The Interrelationships of Efficiency and Effectiveness

MIS MetricsO Effectiveness MIS metrics focus on

an organization’s goals, strategies, and objectives and include:O UsabilityO Customer satisfactionO Conversion ratesO Financial

4-13

The Interrelationships of Efficiency and Effectiveness

MIS MetricsO Security is an issue for any organization

offering products or services over the Internet

O It is inefficient for an organization to implement Internet security, since it slows down processingO However, to be effective it must implement

Internet security O Secure Internet connections must offer encryption

and Secure Sockets Layers (SSL denoted by the lock symbol in the lower right corner of a browser)

4-14

The Interrelationships of Efficiency and Effectiveness

MIS MetricsO Interrelationships between efficiency and

effectiveness

4-15

Metrics for Strategic Initiatives

O Metrics for measuring and managing strategic initiatives include:O Website metricsO Supply chain

management (SCM) metrics

O Customer relationship management (CRM) metrics

O Business process reengineering (BPR) metrics

O Enterprise resource planning (ERP) metrics

4-16

WEBSITE METRICS

O Website metrics include:O Abandoned registrationsO Abandoned shopping cardsO Click-throughO Conversion rateO Cost-per-thousandO Page exposuresO Total hitsO Unique visitors

4-17

SUPPLY CHAIN MANAGEMENT METRICS

O Back orderO Customer order promised cycle timeO Customer order actual cycle timeO Inventory replenishment cycle timeO Inventory turns (inventory turnover)

4-18

CUSTOMER RELATIONSHIP

MANAGEMENT METRICSO Customer relationship management

metrics measure user satisfaction and interaction and includeO Sales metricsO Service metricsO Marketing metrics

4-19

BPR AND ERP METRICSO The

balanced scorecard enables organizations to measure and manage strategic initiatives

4-20

LEARNING OUTCOME REVIEW

O Now that you have finished the chapter please review the learning outcomes in your text