Defining business model key performance indicators using intentional linguistic summaries

Abstract

To sustain competitiveness in contemporary, fast-paced markets, organizations increasingly focus on innovating their business models to enhance current value propositions or to explore novel sources of value creation. However, business model innovation is a complex task, characterized by shifting characteristics in terms of uncertainty, data availability and its impact on decision making. To cope with such challenges, business model evaluation is advocated to make sense of novel business models and to support decision making. Key performance indicators (KPIs) are frequently used in business model evaluation to structure the performance assessment of these models and to evaluate their strategic implications, in turn aiding business model decision making. However, given the shifting characteristics of the innovation process, the application and effectiveness of KPIs depend significantly on how such KPIs are defined. The techniques proposed in the existing literature typically generate or use quantitatively oriented KPIs, which are not well-suited for the early phases of the business model innovation process. Therefore, following a design science research methodology, we have developed a novel method for defining business model KPIs, taking into account the characteristics of the innovation process, offering holistic support toward decision making. Building on theory on linguistic summarization, we use a set of structured templates to define qualitative KPIs that are suitable to support early-phase decision making. In addition, we show how these KPIs can be gradually quantified to support later phases of the innovation process. We have evaluated our method by applying it in two real-life business cases, interviewing 13 industry experts to assess its utility.

Development of a Performance Assessment Model for Contractors in Saudi Arabian Construction Projects

“…Theoretical Background. KPIs serve as crucial metrics for gauging the success of endeavors, particularly in the organizational context [24,25]. They offer insights into project achievement, aiding informed decisions for subsequent or related undertakings.…”

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“…The difference between strategic and operational KPIs depends on the time horizon over which the objectives are met. Strategic KPIs focus on meeting a company's long-term goals and supporting the later stages of the innovation process (Gilsing et al 2021). In comparison, operational KPIs focus on meeting the daily operational objectives (Cristea & Cristea, 2021).…”

Clinical pharmacy key performance indicators for hospital inpatient setting: a systematic review

“…Differing from quality indicators [ 7 ], key performance indicators (KPIs) are quantifiable measures reflecting critical success factors of an organization and are instrumental in monitoring continuous improvement in the quality of health service delivery [ 8 ]. Various procedures have been devised for KPI development, ranging from mathematical formulation [ 9 ] to the appraisal of linguistic summaries [ 10 ]. However, consensus methods involving relevant stakeholders, such as the Delphi technique, are the most employed processes for KPI development [ 11 – 15 ].…”