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Project-driven Enterprise Performance Measurement System Construction

Author: DaiJiang
Tutor: LiuBin
School: Chongqing University
Course: Business Administration
Keywords: Project Performance measurement Case study
CLC: F272
Type: Master's thesis
Year: 2005
Downloads: 280
Quote: 2
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Abstract


More and more enterprises are project-driven, their businesses consist kinds of projects. They provide services such as building construction, telecommunication network implementation, consultancy, audit or training to customers. A project has a well-defined objective (schedule, cost and quality). It may be a unique or one-time endeavor and must be accomplished within the limited period and with the limited resources. Since project has these attributes, project-driven enterprises have different management, costing, control and performance measurement with those traditional manufacturing companies to meet the schedule, cost and quality objectives of the projects. In order to make an effective performance measurement, this paper constructs a performance measurement system for project-driven enterprises concerned the attributes of project and Balance Scorecard. This system may provide improvement for project management and company management, improve the quality of decision and it is helpful for achieving the strategic goals. This paper indicates the shortcomings of traditional project performance measurement and points out project should be viewed as a virtual profit centre and the activities should be regarded as cost centres when a project-driven enterprise does performance measurement. Based on this and Balanced Scorecard theory, we may construct an appropriate performance measurement system for project-driven enterprises. This system starts from the mission of the company, breakdowns it into four perspectives, customer, internal process, learning and growth and financial. We should find out the critical success factor according to the objectives of these four perspectives. Then we may define the measurable key performance indicators (customer perspective: customer satisfactory, new customer and tailor-made service; internal process perspective: projects accomplished per schedule, staff utilization rate, non-conformity in external ISO audit; learning and growth perspective: employee satisfactory, staff personal development plan follow-up, innovation ideas from staff; financial: Days of sales outstanding by project, project cash flow generated by operation, project controllable profit, sales and profit growth by customer, return on capital employed) to follow up and measure the performance of business operations. This paper provides a case study to demonstrate the constructed system as well.

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CLC: > Economic > Economic planning and management > Enterprise economy > Enterprise planning and management decision - making
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