Deck 3: Linking It to Business Metrics

Question 1

The key to linking what IT does to business performance is to create an environment within which everyone thoroughly understands what measures are unimportant to the business and is not held accountable for those measurements.

Answer 1

False

Question 2

IT's "customers" are usually considered to be internal.

Answer 2

True

Question 3

The best measures are tied to business performance and are linked to the strategies and technological capabilities of the company.

Answer 3

False

Question 4

What a company measures and the way it measures influence both the mindsets of managers and the way people behave.

Question 5

What a company spends on IT has a direct impact on its overall performance.

Question 6

Companies that do not understand their customers' needs will likely lose customers but not lose profitability.

Question 7

In most firms, technology is not a significant enough of an expense for it not to have influence on the corporate bottom line.

Question 8

Non-financial measures are predictive of past performance and are not effective predictors for future performance.

Question 9

Competing in the information age is much less about the ability of a company to mobilize its intangible assets and much more about, managing physical, tangible assets.

Question 10

Systems that are not reliable or available when needed, cannot provide customers with the information they need, or cannot give the customers the flexibility they require are very common in companies.

Question 11

It is practically impossible to demonstrate that what a company spends on IT has a direct impact on its overall performance.

Question 12

It is simply not realistic to expect to see a clear correlation between IT and business performance at any level.

Question 13

About half of all IT managers believe that that their ROI expectations for technology are met.

Question 14

Most organizations that link measures of IT input with measures of business performance find great success since the two metrics are so closely linked.

Question 15

IT investments do not always deliver the benefits expected.

Question 16

Effective business metrics programs should also include non-financial measures.

Question 17

Research shows that merely adequate employee satisfaction is insufficient to lead to customer loyalty and ultimately profit.

Question 18

Undelivered IT value remains a serious concern in many organizations.

Question 19

Traditionally, IT has paid close attention to business results, using business results to help focus on its own internal measures of performance.

Question 20

Customer satisfaction surveys are not very helpful in measuring business profitability.

Question 21

It is appropriate to include ________ satisfaction as a business metric for IT.

A) external customer
B) internal customer
C) both internal and external customer
D) management
E) None of the above

Question 22

The type of metric that measures IT as a whole is called a/an:

A) enterprise measure.
B) functional measure.
C) project measure.
D) satisfaction measure.

Question 23

The modified score card metric that accounts for the effect of taxes on operating income is called:

A) revenue growth.
B) operating margin.
C) return on capital employed.
D) return on investment.
E) None of the above.

Question 24

The methodology that annually evaluates the key environmental factors affecting the company to measure the value of IT is called:

A) the balanced scorecard approach.
B) the modified scorecard approach.
C) the strategic imperative approach.
D) None of the above.

Question 25

The type of metric that measures IT employee satisfaction, operational performance and development activity is called a/an:

A) enterprise measure.
B) functional measure.
C) project measure.
D) satisfaction measure.

Question 26

Research shows that merely adequate customer satisfaction is insufficient to lead to:

A) customer loyalty and profit.
B) customer loyalty.
C) profit.
D) competitive advantage.

Question 27

Non-financial business metrics include:

A) customer satisfaction.
B) employee satisfaction.
C) business value.
D) customer satisfaction and employee satisfaction.
E) customer satisfaction, employee satisfaction, and business value.

Question 28

The type of metric that measures business case benefits and initiative delivery is called a/an:

A) enterprise measure.
B) functional measure.
C) project measure.
D) satisfaction measure.

Question 29

The impact of technology on the corporate bottom line is the responsibility of:

A) the IT group alone.
B) the business groups alone.
C) the whole business.
D) corporate governance.

Question 30

The type of metric that ties the work of IT to the performance of the organization called a/an:

A) enterprise measure.
B) functional measure.
C) project measure.
D) satisfaction measure.

Question 31

The leading non-financial indicator of customer satisfaction is:

A) customer satisfaction.
B) employee satisfaction.
C) management satisfaction.
D) both customer and employee satisfaction.
E) None of the above.

Question 32

Most companies concentrate on determining the ________ that specific IT projects deliver.

A) technological advantage
B) competitive advantage
C) market share
D) business value

Question 33

When measuring the effectiveness of a business, the importance ________ of cannot be overemphasized.

A) customer satisfaction
B) employee satisfaction
C) customer and employee satisfaction
D) management satisfaction
E) governance satisfaction

Question 34

The methodology that uses a classic scorecard with measures in all four scorecard dimensions to measure the value of IT is called:

A) the balanced scorecard approach.
B) the modified scorecard approach.
C) the strategic imperative approach.
D) None of the above.

Question 35

The methodology that uses custom key measures linked to a company's overall vision statement to measure the value of IT is called:

A) the balanced scorecard approach.
B) the modified scorecard approach.
C) the strategic imperative approach.
D) None of the above.

Question 36

The modified score card metric that reflects employee satisfaction is called the:

A) management loyalty index.
B) external customer loyalty index.
C) associate loyalty index.
D) None of the above.

Question 37

The type of metric that ties the work of IT to external customer satisfaction, and financial performance is called a/an:

A) enterprise measure.
B) functional measure.
C) project measure.
D) satisfaction measure.

Question 38

The modified score card metric that measures operating income is called:

A) revenue growth.
B) operating margin.
C) return on capital employed.
D) return on investment.
E) None of the above.

Question 39

One metric used to evaluate IT effectiveness is:

A) customer satisfaction.
B) employee satisfaction.
C) management satisfaction.
D) both customer and employee satisfaction.
E) None of the above.

Question 40

The major stumbling block to achieving business performance is:

A) the business itself.
B) business strategy.
C) budgeting and planning.
D) technology.

Question 41

Is it possible for companies to easily link measures of IT input to measures of business performance? Why or why not?

Question 42

List and describe (3) key features that could be considered principles of a good business metrics program for IT.

Question 43

What is the leading indicator of customer satisfaction?

Question 44

Describe the Strategic Imperative scorecard approach to measuring IT value. How is this approach different from the Balanced Score card approach?

Question 45

Describe the Value Based Management approach of demonstrating business value.

Question 46

What is business measurement?

Question 47

Explain the Modified scorecard approach to measuring IT value. What is the benefit of this approach?

Question 48

Describe the concept of the balanced score card.

Question 49

List and describe three different levels of measurement and accountability for IT.

Question 50

List and describe (3) common pitfalls to avoid when implementing business metrics program for IT.