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

19-21: Lufthansa

4-6: KFC

22-24: Department of Public

7-9: Walmart

10-12: Toyota

25-27: JFK Airport (NYC)

13-15: City of Blagoevgrad

28-30: AUBG Canteen

16-18: Zara

31-33: Sheraton Hotels

34-36: OK Taxi

Transportation, Sofia

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?

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

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?

Efficiency IT Metrics

Measure performance of IT system itself

Focus on technology
Doing things right

Throughput
Transaction speed
System availability

Information accuracy
Web traffic
Response time

Effectiveness IT Metrics

Measure impact IT has on business processes & activities

Focus on organizations goals, strategies, and objectives
Doing the right things

Usability
Customer satisfaction

Conversion rates
Financial

How do you measure 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
Measure user satisfaction and interaction
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

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

Step 1: Assessment
Internal and External Strategic Assessment

TM

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

Oracle
Business Intelligence Enterprise Edition

Oracle
Business Intelligence Enterprise Edition

Oracle
Business Intelligence Enterprise Edition

Oracle
Business Intelligence Enterprise Edition

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