Carnegie Mellon University © Robert T. Monroe Management Information Systems Measuring IS Performance Management Information Systems Robert Monroe October 13, 2009

Carnegie Mellon University © Robert T. Monroe Management Information Systems Quiz 1.Two types of metrics identified in today’s reading assignment are eff_______ and eff_______. 2.One measure of the performance of the cmuq-mis wiki is _________________. 3.The Balanced ________ is a measurement and management system described in today’s reading

Carnegie Mellon University © Robert T. Monroe Management Information Systems Goals For Today By the end of today's class you should: –Be able to explain the difference between measurements of system capacity, performance, and load –Be able to enumerate specific, common metrics in each of these categories (capacity, performance, and load) –Understand the connection between selecting appropriate metrics to measure an organization and that organization's performance –Understand the importance of accurate measurement data, and collecting that data in a way that is minimally disruptive

Carnegie Mellon University © Robert T. Monroe Management Information Systems A Question… How do you measure petrol (gasoline)?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Next Question… How do you measure IS Performance?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Key Concepts A metric is a standard measure to assess performance in a particular area. For information systems: –An efficiency metric measures the performance of an information system itself – “Doing things right” –An effectiveness metric measures the impact that the information system has on business processes and activities – “Doing the right things” Source: [HBP09] page 37.

Carnegie Mellon University © Robert T. Monroe Management Information Systems Applying The Concepts Do these metrics measure efficiency or effectiveness? –The number of queries per minute that a database system can perform –Daily total number and percentage of abandoned shopping carts at a retail web site –Number and percentage of customer deliveries made on time each day, week, and month –Peak system memory used each hour –Number of web pages that an average customer visit requires before they check out with a purchase at our website –Average number of days required to add a new feature to an information system Classify the metrics you came up with for the cmuq-mis wiki as efficiency or effectiveness metrics

Carnegie Mellon University © Robert T. Monroe Management Information Systems Key Concepts: Benchmarking Benchmarks are standard, baseline values for a metric that are used to compare currently observed values with expected values Benchmarking is the process of continuously measuring system results, comparing those results to optimal system performance,(benchmark values), and identifying steps and procedures to improve system performance Boundary values define the range of acceptable performance for a specifc metric. Source: [HBP09] page 37.

Carnegie Mellon University © Robert T. Monroe Management Information Systems Some Business Wisdom “That which gets measured, gets done”

Carnegie Mellon University © Robert T. Monroe Management Information Systems Some Business Wisdom “That which gets measured, gets done” So: Make sure you are measuring those things that are critical for the success of your business Choose what you decide to measure carefully

Carnegie Mellon University © Robert T. Monroe Management Information Systems Three Important Types of System (Efficiency) Metrics Performance Capacity Load

Carnegie Mellon University © Robert T. Monroe Management Information Systems Maintain Metrics For Assessing IS SDLC Performance What metrics are most important to measure at each stage of the SDLC? How would you go about measuring them? Setting benchmarks, baselines, and boundary values for them? Are these efficiency metrics, effectiveness metrics, or a combination of both kinds? Impl.Test Develop Design AnalyzePlan

Carnegie Mellon University © Robert T. Monroe Management Information Systems Organizational Effectiveness IS Metrics It is generally much more challenging to effectively measure organizational effectiveness than system performance –… but also very, very important Some techniques: –Project financial measurements: ROI, IRR, break-even, etc. –SDLC performance –IS-project specific effectiveness metrics Examples from text: web-site metrics, CRM metrics, SCM metrics –KPI’s and business intelligence (coming soon) What examples did youcome up with for the cmuq-mis wiki?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Discussion Question: Does “That which gets measured gets done” apply to both efficiency and effectiveness metrics? –Is it more likely to apply to one kind than to the other? What is the cost / downside of rigorous use of metrics in an IS organization? –Corollary: why doesn’t everybody use metrics heavily to run their organizations more effectively?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Discussion Questions: How do you know if your organization has picked the right set of metrics to use in evaluating the IS organization’s performance? Is it possible to become too reliant on metrics? How many metrics is the right number to keep close track off? Does this vary significantly across systems, projects, and organizations?

Carnegie Mellon University © Robert T. Monroe Management Information Systems Wrap-up: Goals For Today By the end of today's class you should: –Be able to explain the difference between measurements of system capacity, performance, and load –Be able to enumerate specific, common metrics in each of these categories (capacity, performance, and load) –Understand the connection between selecting appropriate metrics to measure an organization and that organization's performance –Understand the importance of accurate measurement data, and collecting that data in a way that is minimally disruptive

Carnegie Mellon University © Robert T. Monroe Management Information Systems Midterm Course Evaluations Please take a few minutes now to provide feedback on how you feel the course is going Your input is: –Important – I review your feedback carefully to try to improve the course –Anonymous and confidential –Likely to improve the course