What is it that managers need to know about measuring the success of information technology?...
= Need to understand about IT success is that it is incredibly difficult to measure. Determining the return on investment (ROI) of new computer equipment is difficult.
A few questions banking executives recently raised regarding their IT systems include:
-Is the internal IT operation performing satisfactorily?
-Should the company outsources some or all of the IT operation?
-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?
-What are the characteristics of a healthy project?.
-Which factors are most critical to measure to ensure the project achieves success?
Key performance indicators (KPIs).
-the measure that are tied to business drivers.
Metrics.
-the detailed measures that feed those KPIs.
-Cisco systems implemented a cross-departmental council to create metrics of improving business process operations.
Efficiency and Effectiveness.
= Efficiency IT metrics- measures the performance of the IT system itself including throughput, speed, and availability.
= Effectiveness IT metrics- measure the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases.
Bench marking- Base lining metrics.
* Regardless of what is measured, how it is measured and whether it is for the sake of efficiency or effectiveness, there must be BENCHMARKS- Baseline values the system seeks to attain.
* Bench marking- 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.
The interrelationship of efficiency and effectiveness IT metrics.
= Efficiency IT metrics focus on technology and include:
1. throughput.
2. transaction speed.
3.system availability.
4. information accuracy
5.web traffic
6. response time.
=Effectiveness IT metrics focus on an organization's goals, strategies, and objectives and include:
1. Usability
2. customer satisfaction.
3. conversion rates.
4. Financial.
=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 slow down processing
- however to be effective it must implement internet security
- secure internet connections must offer encryption and secure sockets layers.
Metrics for strategic initiatives.
metrics for measuring and managing strategic initiatives include:
>web site metrics include: Abandoned registrations, Abandoned shopping cards, Click-through, conversion rate, cost-per-thousand, page exposures, total hits, unique visitors.
>supply chain management metrics include: Back order, Customer order promised cycle time, Customer order actual cycle time, Inventory replenishment cycle time, Inventory turns( inventory turnover).
>customer relationship management metrics measure user satisfaction and interaction and include: Sales metrics, Service metrics, Marketing metrics.
>BPR and ERP metrics: the balanced scorecard enables organizations to measure and manage strategic initiatives.
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