Modern service business is increasingly characterized by networks, systems and even ecosystems; these concepts belong to the vocabulary of the most successful international companies as well as to public service management. However, only few studies have focused on the practical implications of service management for the practice of balanced performance measurement.
Our study constructs a conceptual framework for capturing performance of a service system by combining ideas from the service management and performance measurement literatures. This framework is then applied in two service systems, one from the public and one from private sector. In both cases, interviews, series of workshops and an analysis of documentation of the prevailing measurement systems were conducted when applying the framework.
The results indicate that the performance measurement of a service system necessitates measurement information from three perspectives: 1) the performance of individual actors, 2) the internal efficiency of a network, and 3) the customer-perceived performance of service operations.
Our study provides empirical evidence about the design and implementation of performance measurement for a service system. It also provides guidance to overcome the recognized measurement challenges that relate, for example, to the shared responsibilities, integration of measurement data and to capturing customer-perceived impacts of services.
The managerial implications of the study relate both to cultural and technical issues. A shift from an organization-specific measurement culture to a more open and networked way of analyzing performance necessitates that some party is granted legitimacy to act as a leader of the network in the sense of gathering, merging, refining, and sharing the performance results.
Further, a cultural change and change management are needed to change the mindset towards systemic thinking. More concretely, practices and recording methods need to be standardized to enable comparisons and merging of measurement information. The main technical challenge relates to the integration of information systems and measurement data from various sources and technical platforms.
Empirical evidence illustrates the practical need for a new perspective on performance measurement of service systems. This can be achieved by shifting the unit of analysis from organizations to customer-perceived performance. The practical performance measurement systems need to balance with the aspects of effectiveness and outcomes of services, the efficiency of the production network and the performance of individual actors.
Read the whole article from Measuring Business Excellence