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What are the most important metrics used in the strategic control process why

The Importance of Implementing Effective Metrics

Received 2016 Jun 17; Accepted 2016 Oct 10. Abstract Measuring the performance of business processes has become a central issue in both academia and business, since organizations are challenged to achieve effective and efficient results. Applying performance measurement models to this purpose ensures alignment with a business strategy, which implies that the choice of performance indicators is organization-dependent.

Nonetheless, such measurement models generally suffer from a lack of guidance regarding the performance indicators that exist and how they can be concretized in practice.

To fill this gap, we conducted a structured literature review to find patterns or trends in the research on business process performance measurement. The study also documents an extended list of 140 process-related performance indicators in a systematic manner by further categorizing them into 11 performance perspectives in order to gain a holistic view.

Managers and scholars can consult the provided list to choose the indicators that are of interest to them, considering each perspective. The structured literature review concludes with avenues for further research. Business process, Performance measurement, Indicator, Measure, Metric, Structured literature review, Systematic literature review Background Since organizations endeavor to measure what they manage, performance measurement is a central issue in both the literature and in practice Heckl and Moormann 2010 ; Neely 2005 ; Richard et al.

Performance measurement is a multidisciplinary topic that is highly studied by both the management and information systems domains business process management or BPM in particular. Different performance measurement models, systems and frameworks have been developed by academia and practitioners Cross and Lynch 1988 ; Kaplan and Norton 19962001 ; EFQM 2010 ; Kueng 2000 ; Neely et al.

While measurement models were initially limited to financial performance e. Perhaps the best known multi-dimensional performance measurement model is the Balanced Scorecard BSC developed by Kaplan and Norton 19962001which takes a four-dimensional approach to organizational performance: Even today, the BSC is by far the most used performance measurement approach in the business world Bain Company 2015 ; Sullivan 2001 ; Ulfeder 2004.

In particular, an organization can do more with its current resources by boosting the effectiveness and efficiency of its way of working i. In this regard, academic research also suggests a strong link between business process performance and organizational performance, either in the sense of a causal relationship Melville et al. Nonetheless, performance measurement models tend to give little guidance on how business process performance indicators can be chosen and operationalized Shah et al.

They are limited to mainly defining performance perspectives, possibly with some examples or steps to derive performance indicators Neely et al. Whereas fairly large bodies of research exist for both performance models and business processes, no structured literature review of process performance measurement has been carried out thus far.

To the best of our knowledge, existing reviews cover one or another aspect of performance measurement; for instance, reviews on measurement models or evaluation criteria for performance indicators Heckl and What are the most important metrics used in the strategic control process why 2010 ; Neely 2005 ; Richard et al.

What Are the Important Metrics of Business Performance Management?

To some extent, this lack of guidance can be explained by the fact that performance indicators are considered organization-dependent, given that strategic alignment is claimed by many measurement models such as the BSC Kaplan and Norton 19962001. Although the selection of appropriate performance indicators is challenging for practitioners due to the lack of best practices, it is also highly relevant for performance measurement.

This study enhances the information systems literature, which focuses on the design and development of measurement systems without paying much attention to essential indicators.

To fill this gap, our study presents a structured literature review in order to describe the current state of business process performance measurement and related performance indicators. Accordingly, the study addresses the following research questions. What is the current state of the research on business process performance measurement?

Which indicators, measures and metrics are used or mentioned in the current literature related to business process performance? The objective of RQ1 is to identify patterns in the current body of knowledge and to note weaknesses, whereas RQ2 mainly intends to develop an extended list of measurable process performance indicators, categorized into recognized performance perspectives, which can be tailored to diverse purposes.

This list could, for instance, serve as a supplement to existing performance measurement models. Practitioners can use the list as a source for best practice indicators from academic research to find and select a subset of performance indicators that fit their strategy. The study will thus not address the development of specific measurement systems but rather the indicators to be used within such systems.

To make our intended list system-independent, we will begin with the BSC approach and extend its performance perspectives. Given this generic approach, the research findings can also be used by scholars when building and testing theoretical models in which process performance is one of the factors that must be concretized.

The remainder of this article is structured as follows. Theoretical background This section addresses the concepts of performance measurement models and performance indicators separately in order to be able to differentiate them further in the study. Performance measurement models According to overviews in the performance literature Heckl and Moormann 2010; Neely 2005 ; Richard et al. A distinction should, however, be made between models focusing on the entire business Kaplan and Norton 19962001 ; EFQM 2010 ; Cross and Lynch 1988 and models focusing on a single business process Kueng 2000 ; Neely et al.

As mentioned earlier, the BSC provides four perspectives for which objectives and performance indicators ensure alignment between strategies and operations Fig.

  • Given this generic approach, the research findings can also be used by scholars when building and testing theoretical models in which process performance is one of the factors that must be concretized;
  • Even today, the BSC is by far the most used performance measurement approach in the business world Bain Company 2015 ; Sullivan 2001 ; Ulfeder 2004;
  • Actors will come to know some of your business rules — including some you probably didn't want them to.

Other organizational performance measurement models provide similar perspectives. For instance, Cross and Lynch 1988 offer a four-level performance pyramid: Another alternative view on organizational performance measurement is given in business excellence models, which focus on an evaluation through self-assessment rather than on strategic alignment, albeit by also offering performance perspectives.

For instance, the EFQM 2010 distinguishes enablers [i.