CIS 429—BUSINESS INFORMATION SYSTEMS Chapter 4: Measuring the Success of Strategic Initiatives

Measuring IT Success “You can’t manage what you don’t _________”  htm htm ___ invested $1.5 billion on a real-time operations monitoring system (est. 33% return over 5 years) Metrics are required to measure business success Metrics feed key performance indicators (KPIs)  “Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the ________ success factors of an organization.” findic.htm findic.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 company Benchmarking  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.” ng.htm ng.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 serverclientclient/server  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