1. Measuring the Success of Strategic Initiatives
CHAPTER 4
Measuring the Success of Strategic Initiatives

2. LEARNING OUTCOMES
4.1 Compare efficiency IT metrics and effectiveness IT metrics 4.2 List and describe five common types of efficiency IT metrics

3. LEARNING OUTCOMES
4.3 List and describe four types of effectiveness IT metrics 4.4 Explain customer metrics and their importance to an organization

4. MEASURING INFORMATION TECHNOLOGY’S SUCCESS
Key performance indicator – measures that are tied to business drivers
Metrics are detailed measures that feed KPIs
Performance metrics fall into the nebulous area of business intelligence that is neither technology, nor business centered, but requires input from both IT and business professionals

5. 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

6. BENCHMARKING – BASELINE 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
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

7. BENCHMARKING – BASELINE METRICS
Comparing efficiency IT and effectiveness IT metrics for egovernment initiatives

8. THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS
Common types of efficiency IT metrics

9. THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS
Effectiveness IT metrics focus on an organization’s goals, strategies, and objectives and include…

10. 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
However, to be effective it must implement Internet security
Secure Internet connections must offer encryption and Secure Sockets Layers (SSL denoted by the lock symbol in the lower right corner of a browser)

11. THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS
Interrelationships between efficiency and effectiveness

12. METRICS FOR STRATEGIC INITIATIVES
Metrics for measuring and managing strategic initiatives include:
Website metrics
Supply chain management (SCM) metrics
Customer relationship management (CRM) metrics
Business process reengineering (BPR) metrics
Enterprise resource planning (ERP) metrics

13. METRICS FOR STRATEGIC INITIATIVES

14. Website Metrics

15. Supply Chain Management Metrics

16. Customer Relationship Management Metrics

17. BPR And ERP Metrics
The balanced scorecard enables organizations to measure and manage strategic initiatives

18. OPENING CASE STUDY QUESTIONS Apple – Merging Technology, Business, and Entertainment
Formulate a strategy describing how Apple can use efficiency IT metrics to improve its business
Formulate a strategy describing how Apple can use effectiveness IT metrics to improve its business

19. OPENING CASE STUDY QUESTIONS Apple – Merging Technology, Business, and Entertainment
List three CRM metrics Apple should track, along with the reasons these metrics will add value to Apple’s business strategy
List three SCM metrics Apple should track, along with the reasons these metrics will add value to Apple’s business strategy
How can Apply use the balanced scorecard to make its business more efficient?

20. CHAPTER FOUR CASE How Do You Value Friendster?
Friendster specializes in social networking
Friendster received over $13 million in VC capital
Google recently offered to buy Friendster for $30 million
A venture capital company recently valued Friendster at $53 million
Friendster has yet to generate any revenue

21. CHAPTER FOUR CASE QUESTIONS
How could you use efficiency IT metrics to help place a value on Friendster?
How could you use effectiveness IT metrics to help place a value on Friendster?
Explain how a venture capital company can value Friendster at $53 million when the company has yet to generate any revenue

22. CHAPTER FOUR CASE QUESTIONS
Explain why Google would be interested in buying Friendster for $30 million when the company has yet to generate any revenue
Google purchased YouTube for $1.65 billion. Do you think it was a smart investment? Why or why not?