Performance measurement systems (PMS) have long been considered as a means to accomplish organizational coherence to strategic direction and goals. Recently PMS is getting more and more attention both from academics and practitioners, because it is widely alleged as a major obstacle to managerial innovation and improvement programs. There have been many researches dealing with the troubles with traditional PMS mainly based on financial measures. But there are few researches on the relationship between PMS and information systems (IS), which is necessary to facilitate measurement and to integrate all the measures. This thesis is an exploratory study, which focuses on the close relationship between the PMS and information systems. We investigate the reasons that hinder implementing ideal PMS and IS, and prohibit tight integration of PMS and computerized information systems in three manufacturing firms.
We found that the current PMS in the case firms could not provide managers with comprehensive information for timely decision making, due to the low level of horizontal integration of performances and delay in measurement and analysis. While enterprise resource planning (ERP) systems are well known to be able to help integration of relevant information as well as information sharing in a real time basis, all the three case firms have not reached there yet. The success of ERP is found to depend on the extent to which the adopting firm prepares the implementation by reorganizing the existing processes.
These findings lead us to suggest a cohesive framework that integrates the PMS and IS. We propose that PMS can be used to support successful implementation of integrated IS such as ERP with its characteristics of monitoring and controlling organization. Also, ERP system can play a key role in measuring and integrating performance results, which enables to aggregate total performance in quantified metrics.
For practical implementation of the suggested framework, we propose two improvement directions that can help PMS and IS to become more complementary. PMS can help IS implementation by using the "management by process" concept, which drives any function in an organization to see their performance from a process viewpoint, and hence facilitate the process innovation required by ERP. Integrated IS also can help PMS integration by advanced features like data warehousing technique, which is very useful to build a decision support system with strategic performance information.
Finally, managerial implications and future research directions of the suggested integrated framework are discussed.
