Development of performance measurement system in the context of Industry 4: a case study

Abstract

To manage and cope with significant, radical changes of business processes and activities in the context of Industry 4, it is necessary for organizations to have a rapid reactive ability. This requirement may be fulfilled by performance measurement system (PMS) which should be aligned with and could reflect the current digitalization and innovative trends. According to this PMS should be developed due to changes in technology, business environment and organizational processes. But the main uncertainty here is to understand what are the main changes and development trends of PMS needed in the context of Industry 4?To solve this problem, the research presents how PMS can be developed facing industrial revolution using qualitative research method - case study with multiple sources of evidence from semi-structured interviews and documents analysis. According to research results a comprehensive framework for changes in PMS due to the alterations of Industry 4 was developed. Case study results show that technological developments and digitalization processes lead to a more intensive use of predictive methods in planning processes as well as faster control and decision making processes. The main contribution of this paper is to highlight the scientific literature of performance measurement by providing a comprehensive view of developments in PMS in the context of Industry 4. From a practical perspective, the study provides specific practical insights in order to support the reaction processes within organization.