Chapter 8 Module

This document defines key terms related to performance management in information and communications technology (ICT). It discusses ICT performance analysis and the control cycle of setting targets, planning, monitoring progress, analyzing deviations, and taking corrective actions. The document also describes different levels of control objects in ICT, including services, processes, systems, projects, and portfolios. Finally, it outlines categories of web analytics like web performance management, web content performance management, and web user performance management.

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Chapter 8 Module

Uploaded by

Jane Gonzaga

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Download as PDF, TXT or read online on Scribd

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CHAPTER 8

PERFORMANCE MANAGEMENT

Objectives:
Define the basic terms of ICT performance management
Explain the the potentials and methods of Web analytics

FOUNDATIONS OF PERFORMANCE ANALYSIS

To control something means to make decisions. Making decisions is

a primary management duty. In Germany the discipline to support
managers in decision-making is called “Controlling”; in the “English” world
this discipline is called “performance management” or “performance
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analysis”. This specific category of management support comes from some
kind of division of labour on management levels. The manager is (and will
always be) responsible/accountable for decisions. The controller or
performance analyst is responsible/ accountable for transparency (which is
needed to make good decisions). He is somehow a service provider to the
management.
CONTROL CYCLE
The agent resp. manager takes over responsibility for a specific
task or control object (e.g. a project or a process). Because he/she is an
expert in that field he/she will be able to do the job better as the principal
himself/herself. Or he/she will get the job just because the principle does
not have enough capacity or time to do the job himself/herself.
However, the principal is the client or customer and the agent is the
contractor or supplier. Both parties will negotiate a contract in which it
is clearly described what the agent has to do and how the principal has
to reimburse the work of the agent. Finally there is one question: How can
the principal ensure that the agent works in his sense and for his (the
principal’s) objectives and the moral hazard is avoided.

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Stages of the control cycle
Management can be clearly described with the model of the
control cycle. This control cycle has several specific steps:
1. Target agreement: Agree with principle on the targets, which have to
be reached by the control object. Take over responsibility to reach
these targets
2. Planning: Plan how to reach the agreed targets and set sub-ordinate
targets.
3. Realization & Monitoring: Operate to reach the agreed targets and
monitor the degree of target fulfillment.
4. Reporting: Prepare monitoring data for management & forward
scorecard(s) to management
5. Deviation analysis & Forecast:: Analyze reported data and conduct
forecast of future development of data.
6. Communication: Inform the principal…and other stakeholders

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7. Actions & Monitoring: Run corrective actions and monitor the degree
of target fulfillment.

KPIS AND SCORECARDS

KPI = Key Performance Indicator

Indicator = shows an attribute which is important for target
achievement and management
Performance = output orientation; what has been achieved
Key = concentrate on the most important information
There are several categories of indicators:
1. Management indicators are included in target agreements. Target
values to be reached are defined/negotiated
2. Information indicators describe the environment of the management
task. They give hints to the (non-) reachability of the agreed targets.
Expected values of these indicators are documented.
3. Benchmarks serve to compare different but similar control objects. They
are often used to compare control objects from different organizations.
Objects must be comparable and all objects to be compared must be
measured with the same indicators.

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CONTROL OBJECTS IN THE ICT AREA
First let us consider the different levels of control objects in the ICT
area. All types of control objects can also be found similarly outside the
ICT area in every business environment
Elementary objects
1. ICT Service: An ICT service is delivered by your internal IT
department or an external ICT service provider. Each service will be
controlled by a (small) scorecard, which is contained in the so-called
service level agreement (SLA). The scorecards of different services will
be similar or even identical but this does not always make sense.
2. ICT Process: This means an internal process of your internal or
external ICT service provider. Do not confuse with business
processes. Each process will be controlled with a (small) scorecard.
The scorecards of different processes will be similar or even identical
if the type of process is the same. However, you will find different
types of processes and due to this specific scorecards make sense.
3. ICT System: This means hardware and software, e.g. application
systems. Each system will be controlled with a specific scorecard. From
a customer’s point of view system are not so interesting because they
are integrated into services. But internally (in the ICT organization)
systems are specific control objects. The scorecards of different
systems will be similar or even identical.
4. ICT Project: Projects are conducted to build new ICT services,
processes or systems or to improve ICT services, processes or
systems. Each project will be controlled with a specific scorecard. For
specific projects it may be helpful to add specific indicators to the
scorecard.
Portfolio objects
1. ICT Service portfolio: Sometimes a service portfolio is called a

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service catalogue or structured list of services. A service portfolio will
be controlled with a service portfolio scorecard.
2. ICT Process portfolio: The process portfolio is often considered as “the”
organization or a sub-organization, e.g. a team, group or department.
A process portfolio will be controlled with a process portfolio
scorecard.
3. ICT System portfolio: A system portfolio is often denominated as
system landscape or system architecture. A system portfolio will be
controlled with a system portfolio scorecard.
4. ICT Project portfolio: A project portfolio will be controlled with a
project portfolio scorecard.

PROJECT PERFORMANCE

Those projects will often have several project sponsors/awarding

authorities, possibly from different organizations, even legal entities. This

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lets project steering become a serious challenge. We have to care for the
setup and management of the steering committee.
SYSTEMS PERFORMANCE
After projects have been successfully finished the new or modified
system, which was the result of the project, has to be transferred to the
daily operation, which is either taken over by an internal ICT department
or by an external ICT service provider.
SERVICE PERFORMANCE
E-Commerce is in the responsibility of sales and marketing
management. It depends heavily on ICT but is not at all an ICT activity.
However, the E-Commerce management does not want to care for
hardware and software. They want to get the machines provided and
operated by a specialized service provider.

WEB ANALYTICS
In contrast to traditional shops or information points the digitized
versions in the E-Commerce world allow a detailed measurement of all on-
going activities. So the responsible management has many opportunities
to measure and analyse, to manage quantitatively.

Categories of Web Analytics are:

1. Web performance management (WPM) is the planning, analysis and
control of all website related activities and processes as well as all
E-Commerce actions to continuously improve the success of your
organization.
2. Web content performance management (WCPM) contains the analysis
and examination of the content usage or content demand to
continuously optimize your online offering and your website.

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3. Web user performance management (WUPM): serves the analysis of
visitor properties and visitor behaviour to consecutively optimize visitor and
customer focus, customer exploitation, development and loyalty.
Additionally WUPM supports the segmentation of customers or
visitors.

For further discussion please refer to the link provided: Performance Management Cycle
https://www.youtube.com/watch?v=a9r0JeoXuek
Reference Books:
Introduction
For further discussion please to E-Commerce
refer to the link provided: Balanced Scorecards

(Combining Business and Information

https://www.youtube.com/watch?v=I1xO7_KktSE Technology)
By: Martin Kutz, 1st Edition 2016
For further discussion please refer to the link provided: Key Performance Indicators
https://www.youtube.com/watch?v=HJNHT_1aUao
Internet Marketing
(2011, The Internet Marketing Academy and Ventus Publishing ApS)