Selection and Optimization Model of Key Performance Indicators

Big data innovations and development brings opportunities to leverage the impacts of performance metrics on a strategic plan. The purpose of this research work is to study the selection of the performance metrics based on the preferences, and find out what metrics are prioritized in a current strategic plan and how to translate big data insights into meaningful managerial actions. The authors prioritized group commitments and commitment of KPIs in the case study of universities in Mongolia, using the AHP approach for multi-criteria decision makings. Hardcopy questionnaire and interview sessions were used for collecting data to analyse the prioritization results. Based on the prioritization results of strategies, we find that decision-makers strongly prefer strategies with the goals and this preference causes the imbalance of metrics on the dashboard. The prioritization of metrics is highly influenced by the data availability of management reporting. Prioritization of performance metrics are data-driven and bring bottom-up impacts on the dynamics of the strategic plan. The conflicted interests of stakeholders, internal policy, and the excessive amount of metrics make strategic decision makings difficult. The application of AHP in the case study contributes to improving the speed of decision-making processes, providing scientific results on KPIs prioritization and selection, and providing an approach to assess the differences between what strategic planners think and what they execute and prioritize on a practical level. The prioritization of performance metrics is the sustainable approach that can be extended to other strategic decision makings as well, for example prioritizing business model elements or business processes. This research work proves that the multi-criteria decision-making approach AHP can be used to prioritize and identify strategic focus based on selections of the performance metrics. The research also demonstrates the importance of combining bottom-up data-driven analytics with top-down strategy-making processes in big data developments.

[1]  D. Teece.  Business Models, Business Strategy and Innovation , 2010 .

[2]  Sangjoon Park,et al.  Evaluation and comparison of performance analysis of indoor inertial navigation system based on foot mounted IMU , 2016, 2016 18th International Conference on Advanced Communication Technology (ICACT).

[3]  Tobias Bachmeier,et al.  Business Model Generation A Handbook For Visionaries Game Changers And Challengers , 2016 .

[4]  Yves Pigneur,et al.  Clarifying Business Models: Origins, Present, and Future of the Concept , 2005, Commun. Assoc. Inf. Syst..

[5]  Alnoor Bhimani,et al.  Exploring big data’s strategic consequences , 2015, J. Inf. Technol..

[6]  Paolo Gaiardelli,et al.  Aligning strategic profiles with operational metrics in after‐sales service , 2007 .

[7]  Thomas W. Lin,et al.  Strategy, Choice of Performance Measures, and Performance , 2006 .

[8]  Pasi Tyrväinen,et al.  Designing for performance - a technique for business model estimation , 2010 .

[9]  Stuart L. Hart,et al.  An Integrative Framework for Strategy-Making Processes , 1992 .

[10]  H. Bouwman,et al.  Mobile Service Innovation and Business Models , 2010 .

[11]  Paul R. Niven.  Balanced Scorecard Step-by-Step for Government and Nonprofit Agencies , 2003 .

[12]  Jukka Heikkilä,et al.  The Role of Business Models in Developing Business Networks , 2008 .

[13]  H. Chesbrough.  Business Model Innovation: Opportunities and Barriers , 2010 .

[14]  Choonhwa Lee,et al.  Capacity-aware key partitioning scheme for heterogeneous big data analytic engines , 2018, 2018 20th International Conference on Advanced Communication Technology (ICACT).

[15]  Alessio Ishizaka,et al.  Analytic Hierarchy Process and Expert Choice: Benefits and limitations , 2009, OR Insight.

[16]  Alexander Osterwalder,et al.  The business model ontology a proposition in a design science approach , 2004 .

[17]  Rodney McAdam,et al.  Business performance measures and alignment impact on strategy , 2002 .

[18]  Paul Timmers,et al.  Business Models for Electronic Markets , 1998, Electron. Mark..

[19]  Thomas L. Saaty,et al.  On the relativity of relative measures - accommodating both rank preservation and rank reversals in the AHP , 2000, Eur. J. Oper. Res..

[20]  W.A.G.A. Bouwman,et al.  Business models: Tooling and a research agenda , 2012 .

[21]  Sam Solaimani,et al.  A framework for the alignment of business model and business processes: A generic model for trans-sector innovation , 2012, Bus. Process. Manag. J..

[22]  A. Neely,et al.  Big Data for Big Business? A Taxonomy of Data-driven Business Models used by Start-up Firms , 2014 .

[23]  Bassil A. Yaghi,et al.  Enterprise Performance Management: The Global State of the Art , 2008 .

[24]  R. Kaplan,et al.  Using the balanced scorecard as a strategic management system , 1996 .

[25]  A. Neely,et al.  Managing Performance in Turbulent Times: Analytics and Insight , 2011 .

[26]  H. Chesbrough,et al.  The Role of the Business Model in Capturing Value from Innovation: Evidence from Xerox Corporation's Technology Spin-Off Companies , 2002 .

[27]  Rajiv D. Banker,et al.  A balanced scorecard analysis of performance metrics , 2004, Eur. J. Oper. Res..

[28]  Andy Neely,et al.  The Performance Prism: The Scorecard for Measuring and Managing Business Success , 2002 .

[29]  Harry Bouwman,et al.  Analytic Hierarchy Process (AHP) Approach for Selecting Mobile Service Category (Consumers' Preferences) , 2011, 2011 10th International Conference on Mobile Business.

[30]  Richard Bellman,et al.  On the Construction of a Multi-Stage, Multi-Person Business Game , 1957 .