KEY PERFORMANCE INDICATORS FOR THE PMO: METRICS FOR SUCCESS

~ By Michael O'Brochta & Curt Finch

This is part 2 of a 2-part series. Part 1 of this series focused on the co-dependent relationship between executives and PMOs. This 2nd article describes specific key performance indicators that a newly-established PMO can use to measure itself to ensure alignment with the needs of the organisation.

The Project Management Office (PMO) is an office with the capacity to institute a wide variety of positive changes within a company. Indeed, many organisations understand the co-dependence between the executive and PMO, and act to establish PMOs for just this reason. Unfortunately, it is often one of the most incorrectly managed and under-utilised portions of an organisation. Findings presented at the 2010 Gartner ITxpo indicate that nearly half of all PMOs result in failure. The question, then, is why do such a drastic number of businesses feel that their PMOs do not deliver value?

There are a number of answers that need to be explored, but given the highly individual nature of each PMO, it is difficult to provide a definitive list of failure points. However, an issue that pervades nearly every PMO across the board is a problem of metrics. Too many PMOs do not measure their success with the appropriate key performance indicators (KPIs), and due to this failure, high-level executives can easily question the PMO's worth, particularly the results-driven chief financial officer. The PMO, with its emphasis on measuring process and protocols, can fail to focus on KPIs that are relevant to the overall progress of the business. Because of this failure to properly document its success, many otherwise productive PMOs are being shutdown.

The following is a list of important potential KPIs by which a PMO might measure its productivity in the context of overall company success. This list has been extracted from a 2002 study conducted by the Center for Business Practices and documented in the book "Justifying the Value of Project Management." These specific KPIs are particularly relevant to executives and have been found to improve the practice of project management.

It is important to remember two things here. First, as previously mentioned, the role of a PMO is (and should always be) very specific to the needs of a particular company. One should not try to apply these KPIs directly. Rather, they should be tailored to reflect the PMO's prescribed role. Second, too many KPIs can lead to a muddled sense of where accomplishment truly lies. Like having too many gauges on the dashboard of a car, measuring too many indicators of success can be tricky and confusing. It is better to pick a couple of KPIs that fit your company well and focus attention on those rather than trying to measure a plethora of indicators that will lead to hazy results. With those factors in mind, let's take a look at some KPIs that you can use to demonstrate the effectiveness of your PMO:

1. Time to Market

Time to Market = Elapsed Time from Idea Conception to Delivery

Alternate Time to Market = Actual Completion Time - Budgeted Completion Time

The PMO can improve a product's time to market in two ways. First, it can increase the speed at which projects are completed. The benefits here are obvious, as a project that is completed faster generally means greater customer and company satisfaction as it will be available for distribution sooner. The PMO also improves time to market by promoting better adherence to project schedules. Doing so promotes customer satisfaction, improved trust in the project team, and a greater ability to accurately predict future project lifecycles. More importantly, it ensures that a time-dependent product, such as a video game with a pre-Christmas release date, will not miss a deadline that would result in drastically reduced or nonexistent sales. PMOs that consistently improve time to market can streamline processes. For example, projects can be rolled out on time without having to hastily skip steps in the development process.

2. Service Availability

Service Availability = Actual Start Time - Optimal Start Time

Service availability refers to the time it takes to start a project compared to the desired start date. It differs from time to market in two ways: first, it can measure the time that is allotted for specific tasks as opposed to only referring to the completion date of a final product and second, it can be measured at numerous points during project development. As a reference point for a business, it makes sense because it measures the capacity to complete more projects or allocate more time to valuable projects. Further, having a good measure of service availability allows the PMO to divert resources to critical path tasks should the need arise. The PMO specialises in increasing service availability by streamlining tasks and accurately scheduling future projects. If the above equation has a lower number, that means a higher service availability. However, a business must be careful not to have such a high amount of availability that resources are being benched. Wasted resources can drain just as much money from a business as a poorly managed service schedule.

3. ROI

ROI = (Revenue - Investment)/Investment*100

The PMO contributes to a company's ROI by making sure that projects are successfully completed according to the specifications laid out by the parent company and other key stakeholders. Because of this, examining ROI as a KPI offers an incomplete view into the productivity of the PMO. This is because the PMO does not generally influence financial returns directly. Rather, it provides the framework upon which success can be built. ROI, then, must be looked at in combination with other metrics to determine the specific influence of the PMO on the overall performance of a business. ROI can be used to measure success, but it should be looked at on a per-project basis to determine the actual impact of the PMO.

4. Sales Growth

Sales Growth = (Current Sales - Previous Sales)/Previous Sales

The PMO contributes to sales growth in much the same way that it influences ROI. It does so by providing an environment that allows sales to grow more effortlessly, often by improving the other metrics in this list, such as time to market and service availability. Still, measuring sales growth does not specify the PMO's role in the improvement of that growth. Nonetheless, improving sales growth will likely appeal to high level executives, and in particular CFOs, because it is something savvy investors look for in a company. As such, and despite its obvious limitations, sales growth is an important metric because improvement in this area creates more financial opportunities for a business, and can convince many nonbelievers of the importance of a PMO.

5. Service Utilisation

Service Utilisation = Billable Hours/Total Hours

In addition to streamlining tasks by increasing service availability, service utilisation allows a PMO to ensure that time is being used efficiently. Here, service utilisation means looking at the resources assigned to a project, and in particular, the human resources. An advanced PMO will not only be able to decrease the number of people who are over or underworked, but they will be able to assign people to the tasks that they are best at, thus maximising the value of their time. Increasing the quality of service utilisation means a better quality project outcome in the same amount of time. This will optimise customer and employee satisfaction, and will guarantee that a business is getting the most value out of their hires and contracted labour.

Demonstrating improvement in these KPIs can help show the success of a PMO in a company. Ultimately, the PMO has not yet been accepted as a necessary component in many businesses, and so it is up to the office itself to prove the value it provides. It bears repeating, however, that since each PMO is unique, these KPIs must be looked at with an eye to the specific needs of a company. Nonetheless, armed with these measurements of success, a PMO can gain the executive support necessary to survive in a competitive business environment.

---

Michael O'Brochta, PMP has been a project manager for over thirty years. He is an experienced line manager, author, lecturer, trainer, and consultant. He holds a master's degree in project management, a bachelor's degree in electrical engineering, and is certified as a PMP®. As Zozer Inc. President, he is helping organisations raise their level of project management performance. As senior project manager in the CIA, he lead the maturing of the project management practices agency-wide. Since his recent climb of another of the world's seven summits, he has been exploring the relationship between project management and mountain climbing. Mr. O'Brochta's papers and presentations at PMI national, international, and regional conferences have consistently been popular and well received; his last three PMI Global Congress presentations have drawn the largest audiences at those events.

Curt Finch is the CEO of Journyx. Founded in 1996, Journyx automates payroll, billing and cost accounting while easing management of employee time and expenses, and provides confidence that all resources are utilised correctly and completely. Curt earned a Bachelor of Science degree in Computer Science from Virginia Tech. As a software programmer fixing bugs for IBM in the early '90s, Curt found that tracking the time it took to fix each bug revealed the per-bug profitability. Curt knew that this concept of using time-tracking data to determine project profitability was a winning idea and something that companies were not doing - yet. Curt created the world's first web-based timesheet application and the foundation for the current Journyx product offerings in 1997. Learn more about Curt at Journyx

TANGOING YOUR WAY THROUGH THE EXECUTIVE/PMO RELATIONSHIP

~ By Michael O'Brochta & Curt Finch

This is part 1 of a 2-part series. This first article focuses on the co-dependent relationship between executives and PMOs. In part 2, we will describe specific key performance indicators that a newly-established PMO can use to measure itself to ensure alignment with the needs of the organisation.

Introduction

"It takes two to tango." This idiomatic expression, which originated in a 1952 song by Pearl Bailey and was later popularised in 1982 when President Ronald Reagan quipped about Russian-American relations, is an accurate description of the relationship between a project management office (PMO) and an executive. At the end of the day, success for either of them is dependent on the other. Executives depend on the work accomplished by project management offices for their own success, just as project management offices depend on executives for their success.

In a provocative 1999 article in Fortune magazine that addresses why executives fail, the authors get directly to the point and state that the number one reason for executive failure is "bad execution…as simple as that…not getting things done…not delivering on commitments." The article also states that executives who do not deliver are three times more likely to get fired than their counterparts who are delivering. Think about it. What is the dominant purpose of a project? Getting things done! Projects deliver products and services, and they do so according to a schedule. Projects deliver on commitments. Executives need projects so they can deliver on commitments, thus avoiding the number one reason for executive failure.

The opposite is equally true. Projects need executives. The scope of projects and the judgments made about their success have expanded over recent years to the point where project success is almost always beyond the sole control of those running the project. Project success is highly dependent on the availability of resources typically not under the direct control of the project manager. Similarly, the project manager does not have direct control over the networks and systems that their project must fit into. Really, the project manager doesn't have direct control over much of anything upon which the project's success depends. The days of the small, relatively simple, stand-alone project are mostly over. These dependencies, which are essential for the success of the project, are less often in the domain of the project manager and more often in the domain of the executive. The project manager must establish a PMO that is run with a direct two-way supportive relationship with the executive.

A Real Story

To illustrate just how pronounced the dependence between executives and project management offices is, and needs to be, let's consider the following story. This story illustrates just how effective a strong co-dependent relationship can be. Prior to the creation of the PMO with a co-dependent executive relationship, trouble was the norm. After the creation of the PMO with a co-dependent relationship, the situation improved. The story is associated with responsibilities that the co-author of this article, Michael O'Brochta, had when he worked as an employee of the Central Intelligence Agency (CIA). He spent decades there managing hundreds of projects, managing project managers, and leading efforts to advance project management within the organisation. The story begins with a strategic need within the organisation and an executive who recognised this need and made a commitment to take action. Note that this is not a unique story. In a 2009 book by Brian Hobbs, PhD, PMP, titled "The Project Management Office (PMO): A Quest for Understanding," he highlights a global study of project management offices and describes the PMO best practice of tailoring the PMO function to match the needs of the executive, just as happens in this CIA story.

I don't understand it; I have staffed my new organisation with hundreds of highly-skilled project managers, yet even after our first year in business, we can't seem to deliver enough projects on time or to the satisfaction of our customers.

CIA Director

These were the words that O'Brochta first heard when the director of the organisation asked for help. He went on to describe the gap between his vision for his organisation and the current reality: I'm confident that running this organisation as project-based is the way to go, but I never thought it would be this hard,said the director. I periodically review project schedules, and find them to be ever changing. No one is happy about a moving target -- not me, and least of all, not the customer. Quite frankly, I do not see why anyone would come to my organisation if they had a decent alternative.

The project-based organisation described here was formed to advance the mission of the CIA. The best engineers, the best information technology professionals, and the best project managers were combined into a single organisation focused on delivering new and better intelligence analysis systems and capabilities. One of those systems, named Fluent, was described a decade ago in a Reuters article titled "CIA Using Data Mining Technology to Find Nuggets." This was cutting-edge technology focused on critical CIA mission needs at the time.

Finally, the director got to the point of the conversation: Will you come and help?

During the following year, O'Brochta built and ran a strategic-level Project Management Office. Although the published knowledge associated with successful project management offices was rather limited at the time, enough was known for him to select a couple of starting points. O'Brochta started with one initiative focused on the project managers and one initiative focused on the executives. For the project managers, he led the building of a standardised project life-cycle methodology complete with milestones and documentation tailored specifically for the nature of their work. For the executives, he led the building of a standardised governance system complete with reviews, decision-making criteria, and change management strategies tailored specifically for their work.

Previously, the role and actions of the executives and the project managers were out of sync. Project managers were doing their best to draw upon their extensive backgrounds to create and follow project plans, but no two were the same. Likewise, executives were doing their best to support the project managers with resources and decisions, but inconsistency and unpredictability were common.

O'Brochta routinely met with executives and others in the management chain to ensure that decisions about the PMO's focus matched its needs; he did the same with project managers and the various PMOs. Both the executives and project managers learned that each group performed equally important, but different, roles. The executive's role included supplying a standardised project life-cycle methodology for the project managers to use and holding them accountable for using it. The project managers' role included tailoring the provided life cycle methodology and putting it into practice. The executives established and followed a routine for project reviews and associated decisions. The project managers prepared for each of the project reviews with the information needed to support the scheduled decision-making. Predictability and consistency became the norm. Effort that had been directed toward "figuring out what to do" was now directed toward more productive activities associated with running the projects and meeting mission needs.

Initial Reaction

Because of the success of the initiatives, the value of the project management office was established. Other initiatives followed, all targeted at the co-dependent relationship between the executives and the project management offices. These initiatives included training for both the project managers and the executives. They reflected the maturing of project management within the organisation and the value of strengthening the co-dependent relationship between executives and project management offices. It was learned that this relationship is, in and of itself, a project that can be planned and managed within a PMO for the strategic long-term benefit of the organisation.

What's Next?

As satisfying as it might be to establish a successful PMO, the question arises about how to keep them going. This is a serious question. It appears that keeping a PMO going is not so common. A 2007 PMI-sponsored report titled "The Multi-Project PMO: A Global Analysis of the Current State of Practice" states that PMOs are frequently closed or restructured with only about half of them surviving for two years. That's a grim statistic. Executives need projects, project management, and PMOs. Yet, the PMO often struggles to survive. Why? According to the same study, the successful PMOs were the ones that responded to and adapted to the ever-changing needs of the organisation. In other words, the successful PMO's performance was matched to the needs of the organisation. Key performance indicators were established and achieved. And not just any key performance indicators were achieved, but ones that were relevant and meaningful to the executives with whom the PMO had a co-dependent relationship.

Coming up in Part 2: Specific key performance indicators that a newly-established PMO can use to measure itself to ensure alignment with the needs of the organisation.

---

Michael O'Brochta, PMP has been a project manager for over thirty years. He is an experienced line manager, author, lecturer, trainer, and consultant. He holds a master's degree in project management, a bachelor's degree in electrical engineering, and is certified as a PMP®. As Zozer Inc. President, he is helping organisations raise their level of project management performance. As senior project manager in the CIA, he lead the maturing of the project management practices agency-wide. Since his recent climb of another of the world's seven summits, he has been exploring the relationship between project management and mountain climbing. Mr. O'Brochta's papers and presentations at PMI national, international, and regional conferences have consistently been popular and well received; his last three PMI Global Congress presentations have drawn the largest audiences at those events.

Curt Finch is the CEO of Journyx. Founded in 1996, Journyx automates payroll, billing and cost accounting while easing management of employee time and expenses, and provides confidence that all resources are utilised correctly and completely. Curt earned a Bachelor of Science degree in Computer Science from Virginia Tech. As a software programmer fixing bugs for IBM in the early '90s, Curt found that tracking the time it took to fix each bug revealed the per-bug profitability. Curt knew that this concept of using time-tracking data to determine project profitability was a winning idea and something that companies were not doing - yet…Curt created the world's first web-based timesheet application and the foundation for the current Journyx product offerings in 1997. Learn more about Curt at Journyx

PMO KPI examples for measuring success

by Sandra on March 17, 2014 in News, PMO

In 2010, Gartner presented a PMO study at the ‘Symposium ITXPO’. It showed that over the last 7 years 50% of all PMO’s failed. That means that every second PMO was not successful. That sounds scary, doesn’t it?

One major factor for their failure was, that the Business perceived their PMO would not provide sufficient value to its organisation.

Interesting enough, at the same time Gartner’s research showed that ‘world class organisations‘ have a ‘three times’ higher project success rate than the Industry Standard. Those project success rates can be directly linked back to good project management practices and to highly successful PMO’s.

So, where is the discrepancy? Often PMO’s do provide value to the Business, but they are not measuring and advertising it. This often lead to the above perception, where the PMO is not adding value.

An important step to overcome this perception is to define a set of metrics, so called: PMO KPI’s to show how the PMO can increase project performance, actively drive change and support organisational goals and targets.

Definition: PMO KPI

A key performance indicator (KPI) is a type of performance measure (e.g. metrics), which an organisation uses to evaluate the success of a particular activity. The PMO needs to define and agree on a certain set of metrics (with its stakeholders) to demonstrate that it provides value to the Business. Only than, the PMO can be successful. Otherwise the PMO will struggle with its existence.

Possible PMO Metrics

Below you will find some possible metrics. You still need to tweak them to make them fit to your project portfolio and to your organisation. But it is a good starting point and it will give you an idea on what to measure:

Search: 

TOPIC	AREA	POSSIBLE METRIC

Strategic Contribution	Strategic Project Delivery	Increase the success rate of % of strategic projects delivered / the total number of strategic projects
Strategic Contribution	Improve Time to Market	Improve Time to Market Delivery = Elapsed Time from Idea Conception to Project Start (How long do we need to start a project)
Strategic Contribution	Improve Time to Market	Improve Time to Market Delivery = Elapsed Time from Idea Conception to Project Delivery (How long do we need to deliver a project)
Strategic Contribution	Improved Time to Market	The improvement of estimated time versus actual time of project delivery = (comparison between the estimated and the actual time of projects delivered) (How good are we in estimating our project delivery)
Governance Process	Improved Governance Process	Methodology compliance (required deliverables vs. actual deliverables)
Portfolio Management	Overall Project Portfolio successful delivered	% of projects in portfolio delivered / the total number of projects in portfolio
Portfolio Management	Dealing with Change	% of projects remain at same status for x reporting periods
Project Management	Improved Project Management Process	Increase the success rates of the projects = (within a certain time period, the number of success projects/the total of projects)
Project Management	Improved Project Management Process	Improve training rate of project staff members
Project Management	Improved Project Forecasting & Costing	The improvement of estimated cost versus actual cost for the projects = (comparison between the estimated and the actual cost of the projects)
Resource Management	Increased Resource Utilization on Projects	Increased productive resource utilization on project time (ie: Business Analyst >31.5 hrs p/week = Exceeds)
Resource Management	Increased Resource Utilization on Projects	Increased resource utilization on projects = Billable Hours/Total Hours
Stakeholder Management	Improved Customer or User Satisfaction	Customer or user satisfaction survey averages (aim for a % above previous quarter or year average)
Stakeholder Management	Improved Customer Satisfaction	Over-delivered items within budget
ROI	Business Benefits achieved	Post-project ROI review to determine if project ROI is being realised
ROI	Business Benefits achieved	Benefits realised against Benefit forecast for year
ROI	ROI for the year	Simple Return on Investment (ROI) for all of the projects the PMO has oversight for
Staff Members	Improve Staff Retention	Improve project member satisfaction survey averages (aim for a % above previous quarter or year average)
Staff Members	Improve Staff Retention	Improve career path for project members

Showing 1 to 19 of 19 entries

Setting up your PMO for success: Your PMO KPI’s

Review the above metrics and work out which metric(s) might be meaningful for your PMO. The next steps would be to discuss and to agree with your stakeholders (typically this would be your manager and the Business) on the selected metrics. This should also include how often you would report on them. This step is important as it will help clarify the purpose of your PMO.

Once you’ve agreed on these metrics, document the ‘as it is’ state, which will act as your baseline. You would need to have a baseline, in order to demonstrate your improvements later on. Historical data might be able to help you to get a baseline.

The next step will be to design a report or a dashboard, where you can track and report your success on a regular basis.

Collect, validate and assess the data you need in order to compile your report. Monitor your performance. If the performance drops in comparison to your previous reporting time-frame, take corrective action early onwards to get back on track.

Finally, make sure you promote your success. You can use your Intranet, your companies newsletter, or you can compile a case study to promote Project, Program and PMO success. All these activities will help you to promote the value and the success of your PMO.

I hope the above PMO KPI’s are useful for your PMO. If you have any additional metrics or questions, please let me know.

About Sandra

Hi There, Nice to meet you! I'm one of those people who loves my work! Seriously. I love live and I believe that the Internet and the work environment should become a better place. With my PMO blog I would like to share my experience on PMO and Project Portfolio Management. I also work as a Consultant and Freelancer. If you want to know more about what we can do together, please get in touch LinkedIn.

Pendidikan Kejuruan, kunci sukses Indonesia

Mungkin bukan sesuatu yang muluk, tetapi percepatan peningkatan kualitas Dan skill manusia Indonesia melalui bidang kejuruan menjadi sangat penting.

Presiden Jokowi menyadari hal ini. Untuk bisa membentuk manusia yang memiliki skill khusus harus melalui pendidikan kejuruan.

Pendidikan kejuruan memang mungkin sering dipandang sebelah Mata, tapi sekarang berbeda.

Mari kita dukung Bersama.

Fanky Christian
fchristian.blogspot.com

Industri E-Commerce Nasional Bersuka Cita akan Terpilihnya William Tanuwijaya sebagai Orang Indonesia Pertama di Young Global Leaders 2016

Industri E-Commerce Nasional Bersuka Cita akan Terpilihnya William Tanuwijaya sebagai Orang Indonesia Pertama di Young Global Leaders 2016

22 Mar 2016

Jakarta, 21 Maret 2016 - World Economic Forum, sebuah organisasi internasional yang didirikan atas kerjasama pemerintah dan swasta sejak 1971 di Geneva, Swiss, secara resmi kembali mengumumkan para pemimpin pilihannya hariini (17/3) melalui The Forum of Young Global Leaders. Pada pengumuman tahun ini, CEO Tokopedia William Tanuwijaya yang juga adalah Founder dan Ketua Dewan Pengawas Indonesia E-Commerce Association (idEA) ---satu-satunya pemimpin dari Indonesia---dinobatkan sebagai15 pemimpin muda berpengaruh di Asia Pasifik.

Penobatan William sebagai Young Global Leaders (YGL) angkatan 2016 ini meneruskan tradisi pemimpin Indonesia di panggung dunia, setelah sebelumnya Thomas Lembong dan Anies Baswedan, terpilih masing-masing di tahun 2008 dan 2009. Hal tersebut sekaligus mengikuti jejak entrepreneur teknologi dunia, seperti Jack Ma (YGL 2005), Mark Zuckerberg (YGL 2009), Larry PagedanSergey Brin (YGL 2011).

Bruce Nussbaum dari Bloomberg Business Week pernah menyebut YGL sebagai “the most exclusive private social network in the world”, sementara World Economic Forum mendeskripsikan para pemimpin pilihannya sebagai “the voice for the future and the hopes of the next generation".

"Kabar ini merupakan angin segar bagi industri E-Commerce nasional. Dengan adanya anak bangsa yang berprestasi di kancah global, kami semakin yakin Indonesia akan menjadi kekuatan baru ekonomi digital dunia," ungkap Daniel Tumiwa selaku Ketua Umum idEA

6 type ecommerce

Generally speaking, when we think of e-commerce, we think of an online commercial transaction between a supplier and a client. However, and although this idea is right, we can be more specific and actually divide e-commerce into six major types, all with different characteristics.

There are 6 basic types ofe-commerce:

Business-to-Business (B2B)Business-to-Consumer (B2C)Consumer-to-Consumer (C2C)Consumer-to-Business (C2B).Business-to-Administration (B2A)Consumer-to-Administration (C2A)

1. Business-to-Business (B2B)

Business-to-Business (B2B) e-commerce encompasses all electronic transactions of goods or services conducted ​​between companies. Producers and traditional commerce wholesalers typically operate with this type of electronic commerce.

2. Business-to-Consumer (B2C)

The Business-to-Consumer type of e-commerce is distinguished by the establishment of electronic business relationships between businesses and final consumers. It corresponds to the retail section of e-commerce, where traditional retail trade normally operates.

These types of relationships can be easier and more dynamic, but also more sporadic or discontinued. This type of commerce has developed greatly, due to the advent of the web, and there are already many virtual stores and malls on the Internet, which sell all kinds of consumer goods, such as computers, software, books,shoes, cars, food, financial products, digital publications, etc.

When compared to buying retail in traditional commerce, the consumer usually has more information available in terms of informative content and there is also a widespread idea that you'll be buying cheaper, without jeopardizing an equally personalized customer service, as well as ensuring quick processing and delivery of your order.

3. Consumer-to-Consumer (C2C)

Consumer-to-Consumer (C2C) type e-commerce encompasses all electronic transactions of goods or services conducted ​​between consumers. Generally, these transactions are conducted through a third party, which provides the online platform where the transactions are actually carried out.

4. Consumer-to-Business (C2B)

In C2B there is a complete reversal of the traditional sense of exchanging goods. This type of e-commerce is very common in crowdsourcing based projects. A large number of individuals make their services or products available for purchase for companies seeking precisely these types of services or products.

Examples of such practices are the sites where designers present several proposals for a company logo and where only one of them is selected and effectively purchased. Another platform that is very common in this type of commerce are the markets that sell royalty-free photographs, images, media and design elements, such as iStockphoto.

5. Business-to-Administration (B2A)

This part of e-commerce encompasses all transactions conducted online between companies and public administration. This is an area that involves a large amount and a variety of services, particularly in areas such as fiscal, social security, employment, legal documents and registers, etc. These types of services have increased considerably in recent years with investments made in e-government.

6. Consumer-to-Administration (C2A)

The Consumer-to-Administration model encompasses all electronic transactions conducted between individuals and public administration.

Examples of applications include:

Education – disseminating information, distance learning, etc.Social Security – through the distribution of information, making payments, etc.Taxes – filing tax returns, payments, etc.Health – appointments, information about illnesses, payment of health services, etc.

Both models involving Public Administration (B2A and C2A) are strongly associated to the idea of efficiency and easy usability of the services provided to citizens by the government, with the support of information and communication technologies.

Advantages of e-commerce

The main advantage of e-commerce is its ability to reach a global market, without necessarily implying a large financial investment. The limits of this type of commerce are not defined geographically, which allows consumers to make a global choice, obtain the necessary information and compare offers from all potential suppliers, regardless of their locations.

By allowing direct interaction with the final consumer, e-commerce shortens the product distribution chain, sometimes even eliminating it completely. This way, a direct channel between the producer or service provider and the final user is created, enabling them to offer products and services that suit the individual preferences of the target market.

E-commerce allows suppliers to be closer to their customers, resulting in increased productivity and competitiveness for companies; as a result, the consumer is benefited with an improvement in quality service, resulting in greater proximity, as well as a more efficient pre and post-sales support. With these new forms of electronic commerce, consumers now have virtual stores that are open 24 hours a day.

Cost reduction is another very important advantage normally associated with electronic commerce. The more trivial a particular business process is, the greater the likelihood of its success, resulting in a significant reduction of transaction costs and, of course, of the prices charged to customers.

Disadvantages of e-commerce

The main disadvantages associated with e-commerce are the following:

Strong dependence on information and communication technologies (ICT);Lack of legislation that adequately regulates the new e-commerce activities, both nationally and internationally;Market culture is averse to electronic commerce (customers cannot touch or try the products);The users' loss of privacy, the loss of regions' and countries' cultural and economic identity;Insecurity in the conduct of online business transactions.

By José Fernandes

Fanky Christian
Director
PT. DAYA CIPTA MANDIRI SOLUSI
mobile: 62-812-1057533 / 0881-8857333
skype: fankych1211
   

Pengguna TIK Indonesia 2015

Bicara data, itulah yang harus kita lakukan untuk memfokuskan perhatian Dan usaha kita.

Fanky Christian
fchristian.blogspot.com