CHAPTER 4

MEASURING THE SUCCESS OF STRATEGIC

INITIATIVES
INSTRUCTOR: DR. KHALID ALMUSTAFA
IS461: Innovation & Technologies in IS

29 September 2019

Metrics

Measuring Success Metrics are measurements that evaluate results to determine whether
a project is meeting its goals, and we have two core Metrics:

1) Critical Success Factor (CSF):​ ​are the critical steps companies perform to ​achieve
their goals and objectives and implement their strategies and this consists of:
a) Create high-quality products
b) Retain competitive advantages
c) Reduce products cost
d) Increase customer satisfaction
e) Hire and retain the best business professionals

2) Key Performance Indicators (KPI):​ ​are the quantifiable metrics the company uses to
evaluate​ progress toward critical success factors and it consists of:
a) The turnover rate of employees
b) Percentage of help desk calls answered in the first minute
c) Number of products returned
d) Number of new customers
e) Average customer spending

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Efficiency & Effectiveness Metrics:

A. Efficiency MIS Matrics:​ ​measure the performance of MIS itself, such as throughput,
transaction speed, system availability, information accuracy and response time.

B. Effectiveness MIS Matrics:​ ​measure the impact MIS has on the business process and
activities, such as usability, customer satisfaction, conversions rate (# of customers an
organization “touches” for the first time and result for them to purchase its products) and
Financial (return on Investment)

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Metrics for Strategic Initiatives:

We have two types of Metrics:

A. Financial Metrics (Known by most management)

a. ROI (Return on Investment)
b. Internal Rate of Return (IRR) [the ratio of the net present value of investment = 0]
c. Payback method [number of years to recap the cost]
d. Break-even analysis

B. Information Systems Metrics (to help manage strategic initiatives)

a. Website Metrics
b. Supply chain management Metrics
c. Customer relationship management Metric
d. Business process reengineering Metric
e. Enterprise resource planning (ERP) Metric

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A. Website Metrics: ​website traffic is not the only indicator of business success, but
this traffic can be used to determine the revenue generated, the number of new
customers acquired or any reductions in customer business calls.

B. Supply Chain Management Metrics: help the company understand how it is

operating over a given time period and a supply chain strength is measured based
on its weakest link, and the solution is to measure all key areas of the supply chain.

C. Customer Relationship Management Metrics: it has three main areas which are
sales, services, and marketing metrics to measure customer satisfaction and loyalty.

D. Business Process Reengineering & Enterprise Resource Planning (ERP) Metrics:

they are the organizational-wide initiatives and the task to manage them is really
difficult, and one supported method is the balanced scorecard, which is a
management system that enables organizations to clarify their vision and strategy
and translates them into action, and it views the organization from 4 different
prospectives: