MEASURING THE SUCCESS OF STRATEGIC INITIATIVES

Measuring information technology's success

• Key Performance Indicator (KPI) : a measurable value that demonstrates how effectively a company is achieving key business objectives.
• Organizations use key performance indicator  to evaluate their success at reaching targets.
• Selecting the right key performance indicator will depend on your industry and which part of the business you are looking to track.
• Each department will use different key performance indicator types to measure success based on specific business goals and targets.

Efficiency and effectiveness

• Efficiency IT metrics measure the performance of an IT system
• Efficiency IT Metrics refers to the technical aspects such as rate of speed, and availability. 
• There should also be an organized way of documenting and reporting the findings of efficiency IT metrics. Although measuring efficiency of an IT system is important for evaluating and improving performance of an IT system, it is also important to make sure that an IT system is being utilized in a proper way to ensure effectiveness of business processes and is also in line with business objectives.
• Effectiveness IT metrics : measures how IT affects specific aspects of the business world, and a part of the business process.
• Effectiveness measures how well a company, or business is reaching its objectives, and constantly questions as to whether the right actions being taken to meet the given objectives.
• An example in real life would be how well customers are treated at the Apple store when purchasing a new ipod or computer. 
• Performance of the Effectiveness IT Metrics is measured in Benchmarks, so progress can be assessed. Apple being ranked number one in customer service, after taking a number of different surveys, would be considered to be a Benchmark. However, surveys are not just done in fortune 500 companies, they are also performed at companies that don't make as much of a profit but are just as productive, like a value chain.

Benchmarking

• Benchmarking : the process of comparing one's business processes and performance metrics to industry bests and best practices from other companies.
• Dimensions typically measured are quality, time and cost. 
• Process of best practice benchmarking, management identifies the best firms in their industry, or in another industry where similar processes exist, and compares the results and processes of those studied (the "targets") to one's own results and processes.
• Benchmarking is used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others.
• Benchmarking can be internal (comparing performance between different groups or teams within an organization) or external (comparing performance with companies in a specific industry or across industries). Within these broader categories, there are three specific types of benchmarking: 

1. Process benchmarking - the initiating firm focuses its observation and investigation of business processes with a goal of identifying and observing the best practices from one or more benchmark firms. Activity analysis will be required where the objective is to benchmark cost and efficiency; increasingly applied to back-office processes where outsourcing may be a consideration. Benchmarking is appropriate in nearly every case where process redesign or improvement is to be undertaking so long as the cost of the study does not exceed the expected benefit.
2. Financial benchmarking - performing a financial analysis and comparing the results in an effort to assess your overall competitiveness and productivity.
3. Benchmarking from an investor perspective- extending the benchmarking universe to also compare to peer companies that can be considered alternative investment opportunities from the perspective of an investor.
4. Benchmarking in the public sector - functions as a tool for improvement and innovation in public administration, where state organizations invest efforts and resources to achieve quality, efficiency and effectiveness of the services they provide.
5. Performance benchmarking - allows the initiator firm to assess their competitive position by comparing products and services with those of target firms.
6. Product benchmarking - the process of designing new products or upgrades to current ones. This process can sometimes involve reverse engineering which is taking apart competitors products to find strengths and weaknesses.
7. Strategic benchmarking - involves observing how others compete. This type is usually not industry specific, meaning it is best to look at other industries.
8. Functional benchmarking - a company will focus its benchmarking on a single function to improve the operation of that particular function. Complex functions such as Human Resources, Finance and Accounting and Information and Communication Technology are unlikely to be directly comparable in cost and efficiency terms and may need to be disaggregated into processes to make valid comparison.
9. Best-in-class benchmarking - involves studying the leading competitor or the company that best carries out a specific function.
10. Operational benchmarking - embraces everything from staffing and productivity to office flow and analysis of procedures performed.
11. Energy benchmarking - process of collecting, analysing and relating energy performance data of comparable activities with the purpose of evaluating and comparing performance between or within entities.Entities can include processes, buildings or companies. Benchmarking may be internal between entities within a single organization, or - subject to confidentiality restrictions - external between competing entities.

Throughput

• Throughput : how much data can be transferred from one location to another in a given amount of time. 
• It is used to measure the performance of hard drives and RAM, as well as Internet and network connections.
• For example, a hard drive that has a maximum transfer rate of 100 Mbps has twice the throughput of a drive that can only transfer data at 50 Mbps. Similarly, a 54 Mbps wireless connection has roughly 5 times as much throughput as a 11 Mbps connection. However, the actual data transfer speed may be limited by other factors such as the Internet connection speed and other network traffic. Therefore, it is good to remember that the maximum throughput of a device or network may be significantly higher than the actual throughput achieved in everyday use.

Transaction speed

• Transaction speed : the amount of time a system takes to perform a transaction. 
• The more the transaction speed is, the better the customer satisfaction and provides more system availability and faster process.  
• As example when we pay online using our credit card number, it involves some kind of a transaction speed too. This speed depends on the type of connection server. Sometimes, because of slow connection, some databases take so long that the system times out. It makes the user more frustrated trying to log in again and again.

System availability

•  System availability - the number of hours a system is available for users
• There are three principles of system design in high availability engineering:

1. Elimination of single points of failure. This means adding redundancy to the system so that failure of a component does not mean failure of the entire system. See Reliability Engineering.
2. Reliable crossover. In multithreaded systems, the crossover point itself tends to become a single point of failure. High availability engineering must provide for reliable crossover.
3. Detection of failures as they occur. If the two principles above are observed, then a user may never see a failure. But the maintenance activity must.

Information accuracy

•   Information accuracy - the extent to which a system generates the correct results when executing the same transaction numerous times\

Web traffic

• Web traffic : the amount of data sent and received by visitors to a web site. This necessarily does not include the traffic generated by bots.

•  Since the mid-1990s, web traffic has been the largest portion of Internet traffic.

•  This is determined by the number of visitors and the number of pages they visit. 

• Sites monitor the incoming and outgoing traffic to see which parts or pages of their site are popular and if there are any apparent trends, such as one specific page being viewed mostly by people in a particular country. 

• There are many ways to monitor this traffic and the gathered data is used to help structure sites, highlight security problems or indicate a potential lack of bandwidth.

• Not all web traffic is welcomed. Some companies offer advertising schemes that, in return for increased web traffic (visitors), pay for screen space on the site. Sites also often aim to increase their web traffic through inclusion on search engines and through search engine optimization.

Response time

• Response time - the time it takes to respond to user interactions such as a mouse click.
• Response time may refer to:

1. The time lagged between the input and the output signal which depends upon the value of passive components used.
2. Response time (technology), the time a generic system or functional unit takes to react to a given input
3. Responsiveness, how quickly an interactive system responds to user input
4. Round-trip delay time, in telecommunications
5. Emergency response time, the amount of time that emergency responders take to arrive at the scene of an incident from the time that the emergency response system was activated
6. Reaction time, the elapsed time between the presentation of a sensory stimulus and the subsequent behavioral response, in Mental chronometry
7. Search response time or query response time, the time it takes a web server to respond when it receives a query

Effectiveness IT metrics

• One of the most important elements throughout the process of Effectiveness IT Metrics is the ability to evaluate progress. 
• How can a company improve and become better if you don’t know what mistakes that your or your company could be making? Feedback has a tremendous impact on productivity, especially when it comes from your customers.
• Information Week, the business value of technology, states in the following paragraph down some of they key elements used to improve problems with some of the following Effectiveness IT Metrics:

1. Customer Satisfaction
2. Conversion rates
3. Financial
4. Usability

Customer Satisfaction

• Customer Satisfaction it is a measure of how products and services supplied by a company meet or surpass customer expectation. 
• Customer satisfaction : the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals.
• Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty.
• Customer satisfaction data are among the most frequently collected indicators of market perceptions. 
• Their principal use is twofold:

1. Within organizations, the collection, analysis and dissemination of these data send a message about the importance of tending to customers and ensuring that they have a positive experience with the company's goods and services.
2. Although sales or market share can indicate how well a firm is performing currently, satisfaction is perhaps the best indicator of how likely it is that the firm’s customers will make further purchases in the future. Much research has focused on the relationship between customer satisfaction and retention. Studies indicate that the ramifications of satisfaction are most strongly realized at the extremes.
3. On a five-point scale, "individuals who rate their satisfaction level as '5' are likely to become return customers and might even evangelize for the firm. (A second important metric related to satisfaction is willingness to recommend. This metric is defined as "The percentage of surveyed customers who indicate that they would recommend a brand to friends." When a customer is satisfied with a product, he or she might recommend it to friends, relatives and colleagues. This can be a powerful marketing advantage.) "Individuals who rate their satisfaction level as '1,' by contrast, are unlikely to return. Further, they can hurt the firm by making negative comments about it to prospective customers. Willingness to recommend is a key metric relating to customer satisfaction.

Conversion rates

• Conversion rates : How well customers are reached, like how many emails of spam a possible customer replies to, or how many customers click on an add.

Financial

• Financial: When revenues exceed operating cost

Usability

• Usability : the ease of use and learnability of a human-made object.
• In software engineering, usability is the degree to which a software can be used by specified consumers to achieve quantified objectives with effectiveness, efficiency, and satisfaction in a quantified context of use.
• The object of use can be a software application, website, book, tool, machine, process, or anything a human interacts with. 
• A usability study may be conducted as a primary job function by a usability analyst or as a secondary job function by designers, technical writers, marketing personnel, and others.
•  It is widely used in consumer electronics, communication, and knowledge transfer objects (such as a cookbook, a document or online help) and mechanical objects such as a door handle or a hammer.
• Usability includes methods of measuring usability, such as needs analysis and the study of the principles behind an object's perceived efficiency or elegance.
•  In human-computer interaction and computer science, usability studies the elegance and clarity with which the interaction with a computer program or a web site (web usability) is designed. Usability differs from user satisfaction and user experience because usability also considers usefulness.