Performance Management Overview

Performance Management Overview

• Performance management is a discipline in Germany called "controlling," while in other English-speaking countries, it's called "performance management" or "performance analysis."
• Controlling involves making decisions and supporting managers in decision-making.

ICT Performance Management

• ICT performance management covers basic terms, KPIs and scorecards, key control objects in the ICT area, performance measurement, and web analytics.
• Scorecards are structured indicators related to each other, giving a complete overview of control objects.
• For scorecards, use a manageable number of indicators (e.g., 20).
• Scorecards need to be actively and periodically used, fed with planned and actual values, concentrating on relevant attributes for target achievement.

Control Cycle

• An agent/manager takes responsibility for specific tasks or control objects (e.g., a project, or a process).
• The agent is often an expert in the area or task, or the principal lacks the time or resources to do so.
• A contract will be negotiated to outline the responsibilities and reimbursement for the agent's work.
• The principal (client/customer) needs to ensure the agent works in their best interest.

Control Objects in the ICT Area

• The ICT area includes various control objects such as ICT services, ICT processes, ICT systems, ICT projects, and portfolios of the above-mentioned objects.
• Elementary objects (ICT services) will be controlled with a service-level agreement (SLA).
• ICT processes are internal or external ICT service provider controlled processes.
• ICT systems (hardware and software) are also specific control objects.
• ICT projects are designed to build or improve ICT services, processes, or systems.

Portfolio Objects

• ICT organizations manage groups of elementary control objects. For instance, process, service, system, and project portfolios.
• Specific portfolios are controlled by unique scorecards (e.g., service portfolio scorecard, process portfolio scorecard, system portfolio scorecard, project portfolio scorecard).

Cross-Section Control Objects

• Cross-section control objects are not covered by services, processes, systems, or projects; examples include ICT resources (personnel, infrastructure), and GRC management (Governance, Risk, Compliance).

IT Roles in E-commerce

• IT Demand: This is the responsibility of the ICT customer/consumer who plans and communicates needs and efficiently uses the ICT Services.
• IT Supply: This is the responsibility of the internal or external ICT service provider who creates service offerings and provides ICT services effectively and efficiently.
• IT Governance: Top management establishes rules (e.g., who can provide, or consume, ICT services). They ensure the organization's long-term survival considering ICT chances and risks.

E-commerce Performance Management

• Different challenges exist for E-commerce projects compared to traditional ones. These include:
  • Multiple project sponsors possibly from across different organizations and legal entities.
  • Interlinked projects (programmes) that can be part of a wider effort (e.g., online shop development).
  • A mix of off-the-shelf software and custom-built components.

Systems Performance

• After projects end, organizations transfer the new or modified systems to daily operation either by internal or external ICT service providers.

E-commerce System Challenges

• Systems aren't precisely defined like traditional applications.
• E-commerce systems frequently use general infrastructure and middleware components.
• SOA-style architectures (service oriented architecture) allow services potentially used across systems.
• Clear regulations need to be followed for using external services.

Tools and Metrics

• Performance management uses tools from cost accounting, including cost unit accounting and cost distribution sheets.
• Internal service charges need to be considered, along with appropriate measurement of output quantity.

Web Analytics

• Web analytics enables detailed tracking of activities on digitized systems (e.g., online shops, websites) and delivers many opportunities to quantitatively measure, analyze, and manage activities.
• Potential Benefits of web analytics include optimizing management decisions, website optimization, SEO optimization, online marketing, sales process optimization (billing and complaints), customer relationships, profit optimization, gaining competitive advantage.

Web Analytics Categories

• Web Performance Management (WPM): Planning, analysis, and control of website and E-commerce activities.
• Web Content Performance Management (WCPM): Analysis of content usage (demand) for website offering optimization.
• Web User Performance Management (WUPM): Analysis of visitor properties and behavior to optimize visitor, customer focus, exploitation, development, and loyalty.

Web Analytics and KPIs

• Website targets are key to web analytics. KPIs and metrics show target achievement degrees.
• Examples of KPIs are stickiness, slipperiness, recency, prosumer rate, and integrator rate.

Website Metrics

• Clickmaps: Visual representation of website link clicks.
• Heatmaps: Visual representation of general website user clicks (including unlinked areas)
• Cookie definition: Tokens or packets of data for identifying events/transactions.

Service Management

• E-commerce is within the responsibility of sales and marketing, but not an ICT activity.
• Companies don't handle hardware/software, but outsource these to specialized providers.
• Service principles include value proposition (facilitating outcomes, without risk or ownership), and value composition (Service Utility, functionality for customer perspective; Service Warranty, meeting agreed-upon requirements).
• Service levels require clear agreements and defined responsibilities between customers, users, and providers/partners.

Service Level Agreements (SLAs)

• SLAs should include basic information, signatures from partners, agreement summaries and descriptions, scope and limits of the agreement, start date and end date, due dates, reviews (timing and parties involved), and escalation procedures (contact point for support).