Bài giảng Business Driven Technology - Chapter 4 Measuring the Success of Strategic Initiatives

CHAPTER 4Measuring the Success of Strategic InitiativesLEARNING OUTCOMES4.1 Compare efficiency IT metrics and effectiveness IT metrics4.2 List and describe five common types of efficiency IT metricsLEARNING OUTCOMES4.3 List and describe four types of effectiveness IT metrics4.4 Explain customer metrics and their importance to an organizationMEASURING INFORMATION TECHNOLOGY’S SUCCESSKey performance indicator – measures that are tied to business driversMetrics are detailed measures that feed KPIsPerformance metrics fall into the nebulous area of business intelligence that is neither technology, nor business centered, but requires input from both IT and business professionalsEFFICIENCY AND EFFECTIVENESSEfficiency IT metric – measures the performance of the IT system itself including throughput, speed, and availabilityEffectiveness IT metric – measures the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increasesBENCHMARKING – BASELINE METRICSRegardless 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 attainBenchmarking – a process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performanceBENCHMARKING – BASELINE METRICSComparing efficiency IT and effectiveness IT metrics for egovernment initiativesTHE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICSCommon types of efficiency IT metricsTHE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICSEffectiveness IT metrics focus on an organization’s goals, strategies, and objectives and includeTHE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICSSecurity is an issue for any organization offering products or services over the InternetIt is inefficient for an organization to implement Internet security, since it slows down processingHowever, 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)THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICSInterrelationships between efficiency and effectivenessMETRICS FOR STRATEGIC INITIATIVESMetrics for measuring and managing strategic initiatives include:Website metricsSupply chain management (SCM) metricsCustomer relationship management (CRM) metricsBusiness process reengineering (BPR) metricsEnterprise resource planning (ERP) metricsMETRICS FOR STRATEGIC INITIATIVESWebsite MetricsSupply Chain Management MetricsCustomer Relationship Management MetricsBPR And ERP MetricsThe balanced scorecard enables organizations to measure and manage strategic initiativesOPENING CASE STUDY QUESTIONSApple – Merging Technology, Business, and EntertainmentFormulate a strategy describing how Apple can use efficiency IT metrics to improve its businessFormulate a strategy describing how Apple can use effectiveness IT metrics to improve its businessOPENING CASE STUDY QUESTIONSApple – Merging Technology, Business, and EntertainmentList three CRM metrics Apple should track, along with the reasons these metrics will add value to Apple’s business strategyList three SCM metrics Apple should track, along with the reasons these metrics will add value to Apple’s business strategyHow can Apply use the balanced scorecard to make its business more efficient?CHAPTER FOUR CASEHow Do You Value Friendster?Friendster specializes in social networkingFriendster received over $13 million in VC capitalGoogle recently offered to buy Friendster for $30 millionA venture capital company recently valued Friendster at $53 millionFriendster has yet to generate any revenueCHAPTER FOUR CASE QUESTIONSHow 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 revenueCHAPTER FOUR CASE QUESTIONSExplain why Google would be interested in buying Friendster for $30 million when the company has yet to generate any revenueGoogle purchased YouTube for $1.65 billion. Do you think it was a smart investment? Why or why not?