CIS 429—BUSINESS INFORMATION SYSTEMS

Chapter 4:Measuring the Success of

Strategic Initiatives

Measuring IT Success

“You can’t manage what you don’t _________” http://

management.about.com/od/metrics/a/Measure2Manage.htm ___ invested $1.5 billion on a real-time operations

monitoring system (est. 33% return over 5 years)Metrics are required to measure business successMetrics feed key performance indicators (KPIs)

“Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the ________ success factors of an organization.” http://management.about.com/cs/generalmanagement/a/keyperfindic.htm

Efficiency and Effectiveness

Firms spend up to ____% of total capital expenditures on IT—is the investment worth it?

Efficiency: doing things _______ Optimally, least amount of resources

Effectiveness: doing the right things Achieving goals

Efficiency IT metrics Measure the performance of the IT system

Effectiveness IT metrics Measure the impact of IT on the business

Benchmarking—Baseline Metrics

Benchmark A __________ measure used to assess the performance of a

companyBenchmarking

Measuring progress toward a goal at intervals prior to the anticipated attainment of the goal

“Benchmarking is the process of determining who is the very best, who sets the standard, and what that standard is.” http://management.about.com/cs/benchmarking/a/Benchmarking.htm

The Interrelationships of Efficiency and Effectiveness IT Metrics

Efficiency IT metrics Throughput, ___________ speed, system availability, …

Effectiveness IT metrics Usability, customer ____________, conversion rates, …

eBay uses efficiency metrics to improve its effectiveness metrics

High efficiency often leads to ____ effectiveness

Determining IT Efficiency and Effectiveness

Financial metrics are commonly used by business

Customer metrics may be just as important Market share, customer acquisition, customer

____________, …Web traffic analysis

________: a small file deposited on a hard drive by a web site Additionally, it is information for future use that is stored by

the server on the client side of a client/server communication

Click-through: a count of users who click on an ad Banner ad: a small ad on a web site Interactivity: measuring interaction with an ad