Designing Performance Measurement Systems Using Business Models

  • Marco Montemari Department of Management, Università Politecnica delle Marche, Ancona, Italy
  • Maria Serena Chiucchi Department of Management, Università Politecnica delle Marche, Ancona, Italy
  • Christian Nielsen Department of Business and Management, Business Model Design Center, Aalborg University, Aalborg, Denmark
Keywords: Business models, Business model configurations, Performance measurement, Key performance indicators, Business model innovation, Benchmarking

Abstract

Purpose – The purpose of this paper is to explore the advantages and the disadvantages of using the business models (BM) as a platform for designing a performance measurement system (PMS).

Design/methodology/approach – First, a normative approach is adopted to reflect on the process leading from BMs to performance measurement, as well as to highlight the role of BM tools (BM configurations and Business Model Canvas) in this process. Second, case study data is applied to test the applicability of the process and to explore advantages and disadvantages that may arise when using the BM as a basis for the identification of key performance indicators (KPIs).

Findings – Designing KPIs from the BM increases the relevance of the resulting PMS. Further, BM tools such as BM configurations and Business Model Canvas support the identification, coordination and prioritization of value drivers (VDs) (and the related KPIs) and this increases the likelihood that the managerial decision making will be predominantly focused on material aspects of value creation. KPIs designed from a BM can also provide useful information for use in innovating the BM and benchmarking performance against other companies that have adopted a similar BM configuration. However, the path leading from the BM to KPIs is strenuous and complex, and it requires an in-depth knowledge of BM tools.

Research limitations/implications – The proposed approach has not been implemented in practice.

Practical implications – The paper describes a practical implementation process that managers can use to map their company’s BM, identify and organize VDs, and from that design KPIs. This process has the potential to support the decision-making process, to aid in the management of the company’s performance and to help manage, innovate and benchmark the BM.

Originality/value – Differently from most previous BM research, the paper openly addresses the usefulness of clarifying BMs from a performance measurement perspective. 

Author Biographies

Marco Montemari, Department of Management, Università Politecnica delle Marche, Ancona, Italy

Marco Montemari, PhD, is a Research Fellow at the Università Politecnica delle Marche (Italy). His research interests concern management accounting, business models and intellectual capital. Other relevant interests concern balanced scorecard and performance measurement systems in general, overall with regard to their design and implementation process and to their ability to map and measure the value creation process.

For further information on Marco's professional and academic profile see:

@Linkedin: https://www.linkedin.com/pub/marco-montemari/2b/168/979

Maria Serena Chiucchi, Department of Management, Università Politecnica delle Marche, Ancona, Italy

Maria Serena Chiucchi is full professor of accounting at the Università Politecnica delle Marche (Ancona - Italy). Her main research interests are in management accounting, performance measurement and Intellectual Capital accounting. She is member of national and international research groups on Intellectual Capital and management accounting. She is a member of the editorial boards and of the advisory boards of several national and international journals.

Christian Nielsen, Department of Business and Management, Business Model Design Center, Aalborg University, Aalborg, Denmark
Christian Nielsen, Ph.D., is Professor at Aalborg University in Denmark. He is Director of Business Model Design Center (BMDC: www.bmdc.aau.dk). Christian has previously worked as an equity strategist and macro economist focusing specifically on integrating Intellectual Capital and ESG factors into business model valuations. He has worked extensively with business models both as a researcher and as an analyst and has turned his focus to innovating, rejuvenating and optimizing business models. Christian Nielsen has a substantial number of international publications to his record and his research interests concern the commercialization of innovative ideas, business model taxonomies, evaluating and measuring the performance of existing business models and governance perspectives.
Published
10-02-2020