Franco Visani

The practice of strategic performance measurement systems: Models, drivers and information effectiveness

Purpose – For over 20 years, management control literature has indicated the importance of supporting the strategy development and implementation process with strategic performance measurement systems (SPMS) and integrating traditional financial indicators with a set of multidimensional forward-looking measures focusing on the long term and linked to cause-effect relationships. Nevertheless, knowledge on the specific SPMS models used in practice and their effectiveness in supporting the managerial decision-making process is still fragmented and ambiguous. The purpose of this paper is to first analyse the SPMS models used in practice, also considering the role of strategy and firm size as drivers of adoption, thereafter analysing the capability of SPMS models to provide managers with measures that are consistent with their strategic information needs. Design/methodology/approach – The research is based on a survey involving 88 Italian medium-large sized firms (or subsidiaries of multinational firms) operat...

Business Performance Analytics: exploring the potential for Performance Management Systems

Abstract Business Performance Analytics (BPA) entails the systematic use of data and analytical methods (mathematical, econometric and statistical) for performance measurement and management. Although potentially overcoming some traditional diagnostic issues related to Performance Management Systems (PMS), such as information overload, absence of cause-effect relationships, lack of a holistic view of the organisation, research in the field is still in its infancy. A comprehensive model for operationalising analytics for diagnostic and interactive PMS is still lacking. Adopting an action research approach, this paper addresses this gap and develops a five-step framework applied to a company operating in the construction industry. The results show that in addition to encouraging dialogue, BPA can contribute to identifying critical performance variables, potential sources of risk and related interdependencies. A number of critical issues in implementing data-based approaches are also highlighted, including data quality, organisational competences and cultural shifts.

A multidimensional approach to measuring bank branch efficiency

Abstract Bank branch efficiency measurements range from simple ratio and standard regression analyses to more complex frontier approaches, each with specific strengths and weaknesses. However, in isolation, the indexes that these approaches generate fail to capture the multidimensional nature of bank branch efficiency. This paper develops a three-step procedure that enables combining the strengths of the existing approaches. We begin by taking the widest number of efficiency indexes proposed in literature (step 1), reduce the redundant information through a collinearity analysis (step 2), and categorize bank branches into efficiency classes through a clustering procedure (step 3). We test our approach on 23 branches of an Italian regional bank. The results show that this three-step approach is able to provide a multidimensional view of efficiency based on indexes employing a wide range of theoretical and methodological approaches with different ways of conceiving (intermediation vs. production) and measuring (stock, vs. flow, or physical measures) bank outputs and inputs, different definitions of efficiency (technical and cost efficiency), and different measurement approaches (ratios, standard regression analysis and frontier functions). The resulting efficiency ranking is consistent with those that univariate indexes generate and provides a balanced evaluation of branch efficiency when such indexes produce contradictory indications.

Efficiency Measurement for Supplier Selection and Control: A Data Envelopment Analysis Approach

Organisations should focus their supplier selection and control process on several different dimensions, including price, quality, service level, delivery and their ability to support the innovation process. (Dickson, 1966). Obviously, the roles that these dimensions play differ from one product/service to another. For example, the price dimension is more relevant for a low-tech and easy-to-replace commodity than for a high-tech component that might be crucial for the performance of the supplier’s final product.

Management Accounting in a Lean Environment

Lean production methods were pioneered by Toyota in Japan (Toyota Production System). Thereafter, Lean Thinking (Ohno, 1988; Womack et al., 1990; Womack and Jones, 1996) distilled the essence of the lean approach into some key principles and extended them beyond automotive production to any company or organisation, in any industry, in any country, thanks to its positive effects on process improvement, productivity, waste reduction, quality management etc.

Applying business analytics for performance measurement and management. The case study of a software company

The concept of Business Performance Analytics (BPA) represents the adoption of analytical methods to support strategy control and (re)formulation. The purpose of the paper is to explore the potential support that BPA can provide for performance management systems. The study, through an interventionist approach, empirically tests a 5-step BPA framework (Raffoni et al. - forthcoming -) and provides insights for further developments. The longitudinal study, conducted at a company operating in the data-security industry, supported the analysis of BPA potential and offered a number of insights to refine the framework and shed light on critical organisational issues. This paper offers both theoretical and practical suggestions. It is one of the few attempts to investigate the potential of Business Analytics in enhancing strategic control. It provides insights in a practical framework that could be used to guide further research in the area and provides an account of potential challenges faced by businesses when trying to move to strategic control with a data-driven approach.