Chapter 4(Measuring the sucess of strategic initiatives)

MEASURING INFORMATION TECHNOLOGY’S SUCCESS

1)Key performance indicators(KPIs)-the measures that are tied to business drivers those KPIs

2)Metrics are the detailed measures that feed business intelligence that is neither   technology-nor  business-centered,but this area requires input from both IT and business professionals to find success.

3)Performance metrics fall into a nebulous area of .

 EFFICIENCY AND EFFECTIVENESS 

1)Efficiency IT metrics-measure the performance of the IT system itself including through output,speed,and availability

THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS

Efficiency IT metrics focus on technology and include :

•      Throughput - the amount of information that can travel trough a system at any point
•      Transaction speed - the amount of time a system takes to perform a transaction
•      System availability - the number of hours a system is available for users
•      Information accuracy - the extent to which a system generates the correct results when executing the same transaction numerous times
•      Web traffic - includes a host of benchmarks such as the number of page views, the number of unique visitors, and the average time spent viewing a Web page
•      Response time - the time it takes to respond to user interactions such as a mouse click

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

•      Usability – The ease with which people perform transactions and/or find information. A popular usability metric on the Internet is degrees of freedom, which measures the numbers of clicks required to find desired information.
•      Customer satisfaction – Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained, and increases in revenue dollars per customer.
•      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.
•      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).

 

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ENTERPRISE RESOURCE PLANNING "ERP"

• ERP -intergrates all departments and functions throughout an organization into single IT system so that employees can make decisions by viewing enterprisewide information on all business operations.
• Keyword in ERP is "Enterprise"
• It collet data from across an organization and correlates the data generating an enterprisewide view.

BUSINESS PROCESS REENGINEERING

• BUSINESS PROCESS-a standardized set of activities that accomplish a specific task such as processing a customers order
• BUSINESS PROCESS REENGINEERING (BPR)-the analysis and redesign of workflow within and bewtwwe enterprise

                -the purpose of BPR is to make all business process best-in-class

• Finding opportunity using BPR-

                 -a company can improve the way it travel the road by moving from foot to horse and then horse          

                  to car.

                 -BPR looks at taking a different path,such as an airplane which ignore the raod completely.

CUSTOMER RELATIONSHIP MANAGEMENT

• Customer relationship management(CRM)-Involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability
• Many organizations,such as charles schwab and kaiser permanete ,have obtained great success through the CRM sytem.
• Not just technology,but strategy,process and business goal that organization must embrace on an enterprisewide level
• CRM can enable an organization to:

1. Identify types of customers
2. Design individual customers marketing campaigns
3. Treat aech customer as an individual
4. Understand customer buying behaviors.

#3 SCM EFFECTIVE AND EFFICIENT

Effective and efficient SCM systems can enable an organization to:

• Decrease the power of its buyers
• Incerease its own supplier power
• Increase switching costs to reduce the threat of substitute products or services
• Creates entry barriers thereby reducing the threat of new entrants
• Increased efficiencies while seeking a competitive advantages through cost leadership

Wal-Mart and Procter and Gamble (P&G) SCM

CLICK IMAGE FOR LARGER VIEW

SUPPLY CHAIN MANAGEMENT

SCM

• Involves the managment of information flows between and among stages in a supply chain to minimize total supply chain effectivensee and profitability
• Four basic components of supply chain management:

1. Supply chain strategy-managing all resources to meet customer demand.
2. Supply chain partner-partners throughout the supply chain that deliver finished products,raw materials and services.
3. Supply chain operation-schedule for production activities.
4. Supply chain logistics-product delivery process.

CHAPTER 3 STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

STRATEGIC INITIATIVES

• Organizations can undertake high-profile strategic initiatives including

1. Supply chain management (SCM)
2. Customer relationship management  (CRM)
3. Business process reemgineering (BPR)
4. Entreprise resource planning (ERP)

#2 RELATIONSHIP BETWEEN BUSINESS PROCESS AND VALUE CHAIN

A CHAIN OR SERIES OF PROCESS THAT ADD VALUE TO PRODUCT & SERVICE FOR CUSTOMERS.

#2 The Three Generics Strategies

#2 INTRODUCTION

FIVE FORCES MODEL

•     Michael Portes's Five Forces Model is useful tool to aid organization in challenging decision whether to join a newe industry or segment.

CHAPTER 2 IDENTIFYING COMPETITIVE ADVANTAGES

INTRODUCTION:

    What competitive advatages?

•  A product or service that an organization's customers place a greater value on than similar offering from competitor
• Temporary because competitors keep duplicate the strategy.

IMPORTANT TO UNDERSTAND

• DATA
• INFORMATION
• BUSINESS INTELLIGENCE
• IT RESOURCES
• IT CULTURES

DATA

• Raw facts that describe the character of an event

INFORMATION

• Data converted into a meaningful and useful context

BUSINESS INTELLIGENCE

• Application and technologies that are used to support decision-making efforts

IT RESOURCES

• People use
• information
• information technology to work with

IT CULTURES

• Information-Functional Culture-Employees use information as a means of exercising influence or power over others.
• Information-Inquiring Culture-Employess across departments search for information to better understanding .
• Information-Discovery Culture-Employess across departments are open to new insights about crisis and radical changes and seek ways to created competitive advantages.
• Information-Sharing Culture-Employess across departments trust each others to use information to improve performance speacilly problems and failures.

INFORMATION TECHNOLOGY BASICS

INFORMATION TECHNOLOGY BASICS

• Information technology(IT) 

a field concern with the use of technology in managing and processing information.Information technology is an important enabler of business success and innovation.

• Management information system(MIS)

a general name for the business function and academic descipline covering the application of people,technologies and procedures to solve business problem.Its smililar to business function like Accounting,Finance,Operations And Human Resources.

Chapter 1 Business Driven Technology (MGT 300)

                                             CHAPTER 1
Why we need to study IT?

• Information technology is everywhere in business.Understanding IT provides great insight to anyone learning about business. 
  
  Information technology's impact on business Operation   
  1)Business functions receiving the greatest benefits from information technology
  *reducing costs
  *improving productivity 
  *generating growth   
  *generate long-term growth                         

          2)Information Technology Project Goals

        * Enable departments to more efficiently and effectively perform