- 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
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 - Baselining Metrics
Benchmarks - baseline values the system seeks to attain.
Bench-marking - 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.
EFFICIENCY IT METRICS
- Throughput - The amount of information that can travel through 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
- Usability - The ease which people perform transactions and/or find information. A popular usability metric on the Internet is degrees of freedom, which measures the number 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, cost-benefit analysis, and break-even analysis.
Metrics for measuring and managing strategic initiatives:
- Web site metrics
- Supply Chain Management (SCM) metrics
- Customer Relationship Management (CRM) metrics
- Business Process Reengineering (BPR) metrics
- Enterprise Resource Planning (ERP) metrics
Web Site metrics:
- Abandoned registrations - Number of visitors who start the process of completing a registration page and then abandon the activity.
- Abandoned shopping carts - Number of visitors who create a shopping cart and start shopping and then abandon the activity before paying for the merchandise.
- Click-through - Count of the number of people who visit a site, click on an ad, and are taken to the site of the advertiser.
- Conversion rate - Percentage of potential customers who visit a site and actually buy something.
- Cost-per-thousand (CPM) - Sales dollars generated per dollar of advertising.
- Page exposures - Average number of page exposures to an individual visitor.
- Total hits - Number of visits to a Web site, many of which may be by the same visitor.
- Unique visitor - Number of unique visitors to a site in a given time.
Supply Chain Management metrics:
- Back order - An unfilled customer order.
- Customer order promised cycle time - The anticipated or agreed upon cycle time of a purchase order.
- Customer order actual cycle time - The average time it takes to actually fill a customer's purchase order.
- Inventory replenishment cycle time - Measure of the manufacturing cycle time plus the time included to deploy the product to the appropriate distribution center.
- Inventory turns ( Inventory turnover) - The number of times that a company's inventory cycles or turns over per year.
Customer Relationship Management metrics:
- Sales metrics
- Service metrics
- Marketing metrics
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