Key Performance Indicator
- Measures that are tied to business drivers.
- Performance metrics that feed KPIs fall into nebulous area of business intelligence that is neither technology, nor business centered, but it requires input from both IT and business professionals.
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.
Benchmarking
# Benchmark
~ Baseline values the system seeks to attain
# Benchmarking
~ A process of continuously measuring system results, comparing those results to optimal system performance ( benchmark value ) and identifying steps and procedures to improve system performance.
- E-government benchmark
The Interrelationships of Efficiency and Effectiveness IT Metrics
# Efficiency IT metrics focus on technology and include :
- Throughput
2. Transaction speed
= The amount of time a system takes to perform a transaction.
3. System availability
= The number of hours a system is available for users
4. Information Accuracy
= The extent to which a system generates the correct results when executing the same transaction numerous times
5. Web traffic
= Includes a host of benchmarks such as the number of page views, the number of unique visitor and the average time spent viewing a Web page.
6. Response time
= The time it takes to respond to user interactions such as a mouse click.
# Effectiveness IT metrics focus on an organization's goal, strategies and objectives include:
- Usability
2. Customer satisfaction
= Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained and increases in revenue dollars per customer.
3. Conversion rates
= The number of customers an organization " touches" for the first time and persuades to purchase its products or services. This is a popular metric for evaluating the effectiveness of banner, pop-up, and pop-under ads on the Internet.
4. Financial
= Such as return on investment ( the earning power of an organization's assets), cost-benefit analysis _ the comparison of projected revenues and costs including development, maintenance, fixed and variable), and break-even analysis ( the point at which constant revenues equal ongoing costs).
- Security is an issue for any organization offering products or services over the Internet
- It is inefficient for an organization to implement Internet security, since it slows down processing
- Secure Internet connections must offer encryption and Secure Sockets Layers (SSL denoted by the lock symbol in the lower right corner of a browser )'
- Interrelationships between efficiency and effectiveness
Metrics for Strategic Initiatives
# Website metrics
- Abandoned registrations
2. Abandoned shopping cards
= Number of visitors who create a shopping cart and start shopping and then abandon the activity before paying for the merchandise.
3. Click-trough
= Count of the number of people who visit a site, click on an ad, and are taken to the site of the advertiser.
4. Conversion rate
= Percentage of potential customers who visit a site and actually buy something.
5. Cost-per-thousand (CPM)
= Sales dollars generated per dollar of advertising. This is commonly used to make the case for spending money to appear on a search engine.
6. Page exposures
= Average number of page exposures to an individual visitor.
7. Total hits
= Number of visits to a Web site, many of which may be by the same visitor
8. Unique visitors
= Number of unique visitors to a site in a given time. This is commonly used by Nielsen/ Net ratings to rank the most popular Web sites.
# Supply Chain Management Metrics
1. Back order
= An unfilled customer order. A back order is demand (immediate or past due) against an item whose current stock level is insufficient to satisfy demand.
2. Customer order promised cycled time
= The anticipated or agreed upon cycle time of a purchase order. It is a gap between the purchase order creation date and the requested delivery date.
3. Customer order actual cycle time
= The average time it takes to actually fill a customer's purchase order. This measure can be viewed on an order or an order line level.
4. Inventory replenishment cycle time
= Measure of the manufacturing cycle time plus the time included to deploy the product to the appropriate distribution center.
5. Inventory turns ( Inventory turnover)
= The number of times that a company's inventory cycles or turns over per year. It is one of the most commonly used supply chain metrics.
# Customer relationship management metrics.
- Measure user satisfaction and interaction include
1. Sales metrics
- Number of prospective customers
- Number of new customers
- Number of retained customers
- Number of open leads
- Number of sales calls
- Number of sales call per lead
- Amount of new revenue
- Amount of recurring revenue
- Number of proposals given
- Cases closed same day
- Number of cases handled by agent
- Number of service calls
- Average number of service requests by type
- Average time to resolution
- Average number of services calls per day
- Percentage compliance with service-level agreement
- Percentage of service renewals
- Customer satisfaction level
- Number of marketing campaigns
- New customer retention rates
- Number of responses by marketing campaign
- Number of purchases by marketing campaign
- Revenue generated by marketing campaign
- Cost per interaction by marketing campaign
- Number of new customer acquired by marketing campaign
- Customer retention rate
- Number of new leads by product
~ The balanced scorecard enables organizations to measure and manage strategic initiatives.
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