M03L07 Slide: 1

Measuring the success of strategic initiatives

M03L07

Finding Opportunity Using BPR

Types of change an organization can achieve, along with the magnitudes of change and the potential business benefit

Slide: 2

M03L07

Strategic Planning and Technology Strategic

planning is the process of modifying a business to achieve above average profit

Finance

Operations

R&D

MarketingSales

Service

HR

Strategic

Initiatives

Slide: 3

M03L07

Strategic Planning and Technology A single strategic

initiative affects as few as one and as many as all functional areas within and organization

Finance

Operations

R&D

MarketingSales

Service

HR

Strategic

Initiatives

Slide: 4

M03L07

Strategic Planning and Technology Superior

businesses will address multiple strategic initiatives at any given time each of which must be evaluated for effectiveness

Strategic

Initiatives

Strategic

Initiatives

Strategic

Initiatives

Strategic

Initiatives

Slide: 5

M03L07

Strategic Planning and Technology – Base lining

To assess the effects of all strategic planning efforts in the business, an overall business baseline must be created

Finance

Operations

R&D

MarketingSales

Service

HR

Strategic

Initiatives

Slide: 6

M03L07

Strategic Planning and Technology - Base lining

To assess the effects of all strategic planning efforts individual functional areas may also need one or more baselines

Finance

Operations

R&D

MarketingSales

Service

HR

Strategic

Initiatives

Slide: 7

M03L07

Strategic Planning and Technology - Base lining

Base lining may need to occur within various segments of one or more strategic initiatives

Strategic

Initiatives

Strategic

Initiatives

Strategic

Initiatives

Strategic

Initiatives

Strategic

Initiatives

Strategic

Initiatives

Strategic

Initiatives

Slide: 8

M03L07

Strategic Planning and Technology – Base lining

To assess the effects of all strategic planning efforts in the business, an overall business baseline must be created

Finance

Operations

R&D

MarketingSales

Service

HR

Strategic

Initiatives

Efficiency ----- Effectiveness

Slide: 9

M03L07

MEASURING INFORMATION TECHNOLOGY’S SUCCESS

Key performance indicator – measures that are tied to business drivers

Metrics are detailed measures that feed KPIs

Performance metrics fall into the nebulous area of business intelligence that is neither technology, nor business centered, but requires input from both IT and business professionals

Slide: 10

M03L07

EFFICIENCY AND EFFECTIVENESS Efficiency IT metric –

measures the performance of the IT system itself including throughput, speed, and availability

Effectiveness IT metric – measures the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases

Slide: 11

M03L07

BENCHMARKING – BASELINE METRICS Regardless 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 attain

Benchmarking – a process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance

Slide: 12

M03L07

BENCHMARKING – BASELINE METRICS

Comparing efficiency IT and effectiveness IT metrics for

e-government initiatives

Slide: 13

Who’s #1

M03L07

THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS

Common types of efficiency IT metrics

Slide: 14

M03L07

THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS

Effectiveness IT metrics focus on an organization’s goals, strategies, and objectives and include…

Slide: 15

M03L07

METRICS FOR STRATEGIC INITIATIVES

Metrics for measuring and managing strategic initiatives include:◦ Website metrics◦ Supply chain management (SCM) metrics◦ Customer relationship management (CRM)

metrics◦ Business process reengineering (BPR)

metrics◦ Enterprise resource planning (ERP) metrics

Slide: 16

M03L07

Customer Relationship Management Metrics

Slide: 17

M03L07

BPR And ERP Metrics

The balanced scorecard enables organizations to measure and manage strategic initiatives

Slide: 18