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

2. Measuring IT Success “You can’t manage what you don’t _________”  http://management.about.com/od/metrics/a/Measure2Manage. htm http://management.about.com/od/metrics/a/Measure2Manage. 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.” http://management.about.com/cs/generalmanagement/a/keyper findic.htm http://management.about.com/cs/generalmanagement/a/keyper findic.htm

3. 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

4. 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.” http://management.about.com/cs/benchmarking/a/Benchmarki ng.htm http://management.about.com/cs/benchmarking/a/Benchmarki ng.htm

5. 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

6. 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