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The Benefits of e-Business Performance Measurement Systems. A report for CIMA – the Chartered Institute of Management Accountants. Book • Authors.
Table of contents

These results should be widely communicated among not only senior managers directly involved in the e-commerce initiative, but also other individuals within the organization upon whom the initiative will have an impact. One of the important contributions that e-commerce can make to an organization is an expanded communication and informational capability. Any e-commerce measurement system will have little impact if the results are not fully discussed. Results should be monitored regularly and used to identify areas of weakness, address the plans and systems in place, and establish new initiatives to improve deficiencies.

The measures chosen should be quantifiable, in either absolute or percentage terms, as well as complete and controllable.

Program Concentration

They should be complete in that the measure sums up in one number the contribution of all elements of performance that matter; for example, profitability is a summary measure of revenue generation and cost control. They should be controllable in that employees in the organization can actually influence improvement in the factor measured. Some of the metrics shown here are evaluations of overall firm performance.

Others are indicators of e-commerce performance that are derived through an aggregation of measures of individual business units and functions. It is important to evaluate the performance of both overall e-commerce performance and the specific aspects of e-commerce that lead to revenue enhancement or cost savings to determine the success of various operations and corrective action that can be taken to make improvements.

The measures should be of use to both senior and middle managers in the business units and functions. Thus, they must be disaggregated so each unit can examine its contribution to the achievement of the company's e-commerce strategy. These analyses ensure that each unit is making a contribution to the e-commerce initiative and improving corporate profitability.

The Benefits of e-Business Performance Measurement Systems

Additionally, these metrics can be used to provide a gap analysis that permits managers to determine what other inputs or processes are required to meet the company's e-commerce project objectives. Different tools and techniques are available to measure the different aspects of e-commerce performance.

For example, online surveys and polls are powerful tools to help e-commerce enabled companies to better understand the benefit of Internet usage for increasing revenue or decreasing costs related to their customers, thus providing valuable information regarding opportunities to improve overall profitability.

Internally, surveys, focus groups, and other techniques are increasingly being used to measure and monitor employee, personnel, and stakeholder reactions and provide valuable feedback. Once metrics have been developed, data on these indicators must be collected and statistical analysis, such as multiple regression, should be performed to analyze and test the validity of the customized e-commerce measurement system and causal relationships hypothesized by the company.

As companies evaluate the initial measurement system's performance, they will typically add some metrics and drop others because of a lack of evidence of a strong relationship. It is here that a final measurement system emerges, and the focus then shifts to applying the model to support improved decision making.

Applying balanced scorecards to supply chain performance – Industrial Engineering

Start to Measure Your E-commerce Success. After the dot-com fallout, surviving companies needed to sharpen strategy and analyze metrics much better. To what extent are traditional performance measurement systems fit for a world where clicks not bricks determine business success? This CIMA report describes research investigating how organisations have been adapting their performance measurement systems for e-business. The research aimed to identify the features and benefits of an effective e-business performance measurement system by studying twelve organisations that have had some success in developing performance measurement systems suitable for the on-line environment.

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Policies Disclaimer. Many domestic and foreign companies are fighting with their products for consumers and offer them a growing, almost infinite variety. The goal of satisfying as fast as possible the needs of consumers, led in recent years to a race that resulted in shorter product life cycles and clock speeds. Today, in times of crises and weak economic growth, companies in addition are especially forced to maintain or increase profit through efficiency.

The logistics and the supply chain influence these factors in a great way.

Related books and articles

SCM deals with the coordination of in-house order processing and the inter-company supply chain and thus goes beyond the internal business perspective. The success of a company and its competitiveness will depend on the cooperation with the companies that are in the same value chain or from the same network. The consideration of only internal organizational and process structures alone is not enough for companies to stay in the market anymore. This paper gives a systematic introduction to the fundamental concepts of supply chain and supply chain management.

E COMMERCE Advantages Disadvantages HINDI

The role of E-Businesses in Supply Chain Management and the underlying challenges as well as success factors will be presented in the second part. A case study on the practical example of Intel implementing the E-Supply Chain solution RosettaNet forms the third and final part before finishing in the conclusion.

Companies are not operating in isolation but are members of supply chains, which comprise a whole network of suppliers and customers.

E-Business Performance Measurement: A User-Level Approach

Today's competition is less between individual companies but more between entire value chains Corsten und Gabriel , 4. Advances in information and communications systems and the globalization of markets, foster the desire of reducing the depth of added value within a company. The use of outside services and the therefore consequent decline in in-house productions are common developments by national and international companies.

At the same time, the requirements increase, especially in terms of timely satisfaction of needs within each value chain. All these requirements can be met by fostering a proactive management of the whole supply chain. Compared to the emergence of many other management approaches SCM was not initiated by academics, but arose from needs in practice.

In the s, an American consulting firm used the concept of SCM for the first time. The discussion of many authors regarding the definitional classification of SCM as part of the logistics, logistics management or as a stand-alone concept illustrates the problematic Stommel , A representative of this view is among others Prof.

Therefore supply chain management is one the most important measures for logistics planning and execution.

Supply Chain Management has the task to realize advantages in competition for all parties along the value chain. Competitive advantages can be based mainly on cost reduction throughout the supply chain, and improvements to the end customer service for example. Especially the increased globalization and new technologies make it possible for companies to benefit from the integration in supply chains instead of following a vertical integration strategy, i.

According to the pull-perspective, the supply chain starts with the customer from which all decisions origin Skjott-Larsen, et al. Having defined supply chains, it is relevant to briefly introduce the challenges of supply chains. The integration of several member organizations in one supply chain with their own objectives imposes challenges on managing the supply chain as a whole Skjott-Larsen, et al.

This is also due to the fact that there is usually no formal organization managing the supply chain Aulinger , The ultimate goal of any supply chain must be to manage uncertainty in demand with the existing supply capabilities.