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288 Part 2 Strategy and applications

the dynamism of e-business, some of the goals that require processes to be re-engineered
cannot be achieved immediately. Prioritization of objectives, in this case from 1 to 6, can
help in communicating the e-business vision to staff and also when allocating resources to
achieve the strategy. As with other forms of strategic objectives, e-business objectives should
be SMART (Box 5.4) and include both efficiency and effectiveness measures.

Box 5.4 Setting SMART objectives

You have probably heard before that successful objectives and measures to assess
performance are SMART. SMART is used to assess the suitability of objectives set to
drive different strategies or the improvement of the full range of business processes.
(i) Specific. Is the objective sufficiently detailed to measure real-world problems and
opportunities?
(ii) Measurable. Can a quantitative or qualitative attribute be applied to create a
metric?
(iii) Actionable. Can the information be used to improve performance? If the objective
doesn’t change behaviour in staff to help them improve performance, there is little
point in it!
(iv) Relevant. Can the information be applied to the specific problem faced by the
manager?
(v) Time-related. Does the measure or goal relate to a defined timeframe?

The Key performance indicators column in Table 5.6 gives examples of SMART
e-business objectives.

Efficiency Put simply, efficiency is ‘doing the thing right’ – it defines whether processes are completed
Minimizing resources or using the least resources and in the shortest time possible. Effectiveness is ‘doing the right
time needed to complete
a process: ‘doing the thing’. ‘Doing the right thing’ means conducting the right activities and applying the best
thing right’. strategies for competitive advantage. From a process viewpoint it is producing the required
outputs and outcomes, in other words meeting objectives. When organizations set goals for
Effectiveness
e-business and e-commerce, there is a tendency to focus on the efficiency metrics such as
Meeting process
objectives, delivering the time to complete a process and reducing costs. Such measures often do not capture the over-
required outputs and all value that can be derived from e-business. Effectiveness measures will assess how many
outcomes: ‘doing the
right thing’. customers or partners are using the e-business services and the incremental benefits that
contribute to profitability. For example, an airline such as BA.com could use its e-channel
services to reduce costs (increased efficiency), but could be facing a declining share of online
bookers (decreased effectiveness). Effectiveness may also refer to the relative importance of
objectives for revenue generation through online sales and improving internal process or
supply chain efficiency. It may be more effective to focus on the latter.