Professional Documents
Culture Documents
E-Business CH 10-63152
E-Business CH 10-63152
Ch 10
Evaluation:
Key issues:
The evaluation process;
Financial evaluation;
Technology evaluation;
Website evaluation;
Feedback control
focuses on an organisation’s outputs with an emphasis on the quantity and quality of products and services
produced (Daft, 2003). Also, feedback control is used as a basis for matching actual performance against set
targets. In e-business, targets may include financial, customer satisfaction, sales, quality, number of
‘hits’ on the website, advertising revenue, or number of new customers.
The standard performance
may be linked to the reward system in the organisation
and should be set high enough to present a challenge to workers
but not so onerous as to make it unachievable. In some instances
it may be necessary to adjust the set standards to better reflect the
resources and capabilities within the organisation.
Measure actual performance
There are activities that take place within organisations that can be
measured quantitatively. Managers can monitor the performance of
the functional activities by preparing formal reports on the actual
outputs achieved over a set time scale.
Financial evaluation:
The finances of any business are part of the control function and it is vital that managers keep monitoring and
assessing the financial health of their organisation.
g Cash flow: the level of short-term working capital or liquidity that the firm has to ensure it can operate on a
day-to-day basis.
g Customers accounts: refers to credit control, terms of credit and payment control.
The balance sheet is a financial statement that outlines the organisation’s financial position by focusing on
assets and liabilities at a given point in time.
The income statement is a summary of an organisation’s financial performance over a given period of time.
This is sometimes referred to as the profit and loss account. The income statement outlines all sources of
income coming into the firm over a period of time and subtracts all the expenses and costs to derive the net
income (profit or loss) for the period.
Technology evaluation:
Technology is one of the key drivers of e-business so it is important for organisations to understand their current
position regarding the stage of technology adoption and what can be achieved from it.
There are various different levels of e-business applications and organisations will adopt those that help achieve
their objectives within the constraints of finance and skills (Daniel et al., 2002).
Human resource evaluation:
The evaluation of human resources in e-business is undertaken at four different
levels. These are:
g The evaluation of the recruitment process in attracting and retaining key skills;
g The need to change the internet architecture in order to measure relevant criteria;
g The need to recognise that workgroups do not operate in isolation, but have to recognise their impact on other
groups within a network organisation;
g The need to recognise that the impact of the internet extends beyond the internal environment.
The evaluation stage of the strategy process is continuous and in-depth. Managers must undertake effective
evaluation of performance to make better-informed judgements and decisions about future strategy.
E-business is a technologically-based activity and, therefore, evaluation of the performance of the technology is
a high priority. Managers expect the technology to enable the firm to operate more efficiently and at lower cost.
THANKYOU