KPIs in a service organization

- a case study of Axfood IT

Master’s Thesis 30 credits

Department of Business Studies
Uppsala University
Spring Semester of 2017
Date of Submission: 2017-05-30

Johanna Ljunglöf
Helena Nisser
Supervisor: Jan Lindvall
ABSTRACT'
'
This'study'reports'on'an'approach'of'how'characteristics'of'effective'KPIs'are'fulfilled'
within'a'service'organization.'In'particular,'five'characteristics'for'effective'KPIs'have'
been'identified'from'previous'research:'sparse,'simple,'actionable'&'owned,'
involvement'and'correlated.'The'study'is'based'on'a'singleEcase'study'in'order'to'gain'
deep'understanding'for'how'the'five'criteria'are'met.'Data'was'collected'through'a'
survey'and'semiEstructured'interviews'in'which'the'questions'were'based'on'the'
criteria'of'effective'KPIs.'The'collected'data'was'analyzed'by'using'an'abductive'
approach'where'we'find'that'the'criteria'for'effective'KPIs'had'weak'fulfillment'in'the'
investigated'case'company.'The'criteria'with'lowest'fulfillment'were'actionable'&'
owned'and'correlated.'We'request'further'research'within'the'area'of'criteria'for'
performance'measures'in'general'and'for'KPIs'in'particular.'This'could'potentially'
enable'more'standardized'measures'of'performance'for'service'organizations.'

Key words: Performance measurement system, PMS, Performance measure, metric, Key
performance indicator, KPI, Service organization.
Contents'
1.# Introduction#.................................................................................................................................................#1#
2.# Literature#review#.......................................................................................................................................#3#
2.1#Performance#measurement#systems#.............................................................................................#3#
2.2#Performance#measurement#systems#in#service#organizations#...........................................#5#
2.3#Key#Performance#Indicators#..............................................................................................................#7#
2.4#Characteristics#of#effective#KPIs#......................................................................................................#8#
2.4.1#Sparse#..................................................................................................................................................#8#
2.4.2#Simple#................................................................................................................................................#10#
2.4.3#Actionable#&#Owned#...................................................................................................................#11#
2.4.4#Involvement#....................................................................................................................................#12#
2.4.5#Correlated#........................................................................................................................................#13#
2.5#Summary#of#literature#review#.........................................................................................................#15#
3.# Methodology#..............................................................................................................................................#17#
3.1#Research#approach#..............................................................................................................................#17#
3.2#The#Case#Company#–#Axfood#IT#......................................................................................................#18#
3.3#Data#Collection#.......................................................................................................................................#20#
3.3.1#PrePStudy#.........................................................................................................................................#20#
3.3.2#Interviews#........................................................................................................................................#22#
3.4#Data#Analysis#..........................................................................................................................................#24#
4.# Analysis#–#Making#sense#of#the#use#of#KPIs#...................................................................................#26#
4.1#Sparse#........................................................................................................................................................#26#
4.2#Simple#........................................................................................................................................................#28#
4.3#Actionable#and#Owned#.......................................................................................................................#29#
4.4#Involvement#............................................................................................................................................#31#
4.5#Correlated#................................................................................................................................................#32#
5.# Concluding#discussion#...........................................................................................................................#36#
6.# Suggestions#for#future#research#.........................................................................................................#39#
7.# References#...................................................................................................................................................#40#
#

# #

!
!
 1. Introduction'
During#the#last#three#decades,#a#performance#measurement#revolution#(PMS)#has#been#
witnessed.#In#the#1980’s,#the#traditional#financial#ratios#developed#by#DuPont#and#
General#Motors#started#to#get#questioned.#The#realization#that#pure#financial#ratios#and#
budgetary#control#was#not#ideal#for#the#modern#organization#lead#to#that#(PMS)#started#
to#evolve#after#almost#80#years#of#dormancy#(Neely#&#Bourne,#2000).#The#traditional#
type#of#performance#measurement#was#mainly#categorized#by#accounting#data#simply#
because#that#was#the#data#available.#However,#since#the#accounting#data#used#only#
became#available#after#the#books#were#closed,#the#measures#primarily#became#lagging#
and#thus#provided#little#to#no#value#for#the#organization#(Jacob,#2017).#

A#surge#of#interest#for#new#ways#of#measuring#performance#lead#to#the#development#of#
new#frameworks#such#as#the#balanced#scorecard#(BSC).#The#new#systems#for#measuring#
performance#now#focused#on#combining#financial#and#nonPfinancial#measures#to#control#
organizations#and#steer#them#in#the#desired#direction#(Neely#&#Bourne,#2000;#Pun#&#
White,#2005).#More#attention#was#directed#towards#the#performance#measurement#tool#
Key#Performance#Indicators#(KPI),#making#it#possible#to#track#performance#in#real#time,#
compare#it#to#the#desired#outcome#and#serve#as#support#for#decisionPmaking.#Measures#
such#as#KPIs#help#managers#to#analyze#options#and#reduce#uncertainty#concerning#
decision#making#since#it#provides#key#information#about#organizational#activities#
(Hubbard,#2014).###

A#KPI#is#derived#from#an#organization's#strategy,#which#in#its#turn#is#developed#from#its#
vision#and#mission.#The#process#of#clearly#defining#the#strategy#is#therefore#an#important#
ingredient#when#developing#successful#KPIs#(Anthony,#Govindarajan,#Hartmann,#Kraus#&#
Nilsson,#2014).#However,#defining#strategic#goals#and#implementing#them#may#sound#
easier#that#what#it#is.#The#results#from#a#study#of#Fortune#500#CEO’s#conducted#by#
Forbes#showed#that#82%#of#the#CEO’s#found#it#easy#to#effectively#plan#their#
organization's#strategy#while#only#14%#of#the#same#CEO’s#thought#that#they#effectively#
implemented#the#strategy#(Jakob,#2017).#Neely#&#Bourne#(2000)#elaborates#on#the#
subject#and#found#that#the#two#main#reasons#why#performance#measurement#initiatives#
fail#is#due#to#poor#design#of#KPIs#and#difficulty#of#implementation.#
#

! 1#
!
The#process#of#developing#successful#PMS#and#KPIs#becomes#even#more#complicated#in#
service#organizations.#Traditional#management#control#systems#(MCS)#are#developed#
with#manufacturing#organizations#as#the#norm#where#the#measurement#of#physical#
inventory#goods#is#of#interest,#this#becomes#problematic#for#service#organizations#
(Anthony#et#al.,#2014).#Why?#Simply#because#of#the#fact#that#no#tangible#goods#are#
produced#(Modell,#1996).#Thus,#developing#metrics#that#measure#the#outcome#of#a#
service#where#the#benefit#is#subjective#depending#on#the#receiver#becomes#challenging#
(Kantsperger#&#Kuntz,#2010).#
#
In#the#management#and#control#functions#of#organizations,#PMS#and#tools#such#as#KPIs#
are#a#growing#area#of#interest.#However,#the#development#of#such#systems#and#tools#are#
challenging.#The#existing#literature#mainly#points#out#how#management#performance#
systems#should#be#developed#(Neely,#Gregory#&#Platts,#1995;#Neely,#1999;#Bourne,#Mills,#
Wilcox,#Neely,#&#Platts,#2000;#Kaplan,#1984).#In#contrast,#this#study#aims#to#contribute#to#
a#better#understanding#for#criteria#of#effective#KPI#and#how#KPIs#are#used#within#a#
service#organization.#This#is#done#through#a#single#case#study#where#we#examine#how#
KPIs#are#used#in#practice#and#how#they#are#perceived#by#its#users,#this#leads#to#the#
following#question:!
#
How!does!KPIs!within!a!service!organization!meet!the!criteria!for!effective!KPIs?!
!
!
# #

! 2#
!
 2. Literature'review'
In!this!section!literature!from!previous!research!is!presented!in!order!to!provide!a!
background!to!the!topic!for!this!study.!First,!the!development!and!relevance!of!
performance!measurement!systems!is!discussed!and!is!followed!by!putting!PMS!in!the!
context!of!a!service!organization.!Next!section!presents!the!basics!of!key!performance!
indicators!and!is!followed!by!a!presentation!of!five!identified!characteristics!of!effective!key!
performance!indicators.!Lastly,!the!literature!review!is!summarized!with!a!model.!

2.1'Performance'measurement'systems'
PMS’s#are#defined#by#Neely#et#al.,#(1995,#p.#80)#as#“the#set#of#metrics#used#to#quantify#
both#the#efficiency#and#effectiveness#of#actions”#where#effectiveness#is#to#what#extent#a#
goal#is#fulfilled#(Choong,#2013).#Lynch#and#Cross#(1995)#defines#PMS#as#a#tool#to#
motivate#behaviors#that#will#result#in#increased#performance.#Essentially,#a#PMS#is#an#
important#management#function#as#it#translates#strategy#and#objectives#into#a#set#of#
objectives#that#guide#manager’s#actions#to#achieve#desired#results#(Wouters#&#Wilderom,#
2008).#It#tracks#the#implementation#of#strategy#as#it#enables#managers#to#compare#actual#
results#with#the#organization's#strategic#goals#and#also#encourage#employee#behavior#
that#is#consistent#with#the#strategy#(Simons,#Dávila,#&#Kaplan,#2000;#Neely,#1999).#Neely#
(1999,#p.#212)#states#that#“when#an#organization#realizes#that#the#strategy#is#a#function#
of#the#‘pattern#of#decisions#and#actions’#it#takes,#then#it#becomes#clear#that#appropriately#
designed#performance#measures#can#encourage#the#implementation#of#strategy”.#
Further,#the#information#that#the#PMS#provides#should#be#used#to#challenge#the#strategic#
assumptions#and#test#its#validity#(Bourne#et#al.,#2000).#Thus,#designing,#implementing#
and#using#the#appropriate#PMS#is#viewed#by#many#managers#as#the#core#element#of#
management#control#(Anthony#et#al.,#2014).#
#
The#use#of#PMS#can#be#traced#back#to#the#early#1900’s.#Since#the#same#management#
techniques#has#been#used#for#several#decades#one#could#assume#that#organizations#
should#have#well#developed#and#wellPfunctioning#PMS#in#place#(Neely,#1999).#However,#
this#is#not#the#case#according#to#several#studies#on#the#subject#(Neely,#1999;#Neely#et#al.,#
1995;#Kaplan,#1984).#The#interest#for#a#renewal#of#PMS#started#to#grow#in#the#1970’s#and#
1980’s#due#to#identified#shortcomings#in#the#traditional#and#backward#looking#
accounting#based#PMS#(Bourne#et#al.,#2000).#The#traditional#financial#measures#were#

! 3#
!
mainly#criticized#for:#encouraging#short#termism;#lack#of#strategic#focus#and#not#being#
externally#focused#in#relation#to#competitors#and#customers#(Anderson#&#McAdam,#
2004).#Due#to#the#historical#nature#of#traditional#financial#measures,#they#were#further#
described#as#‘lag#indicators’,#as#they#are#mainly#a#reflection#of#past#actions#(Kaplan#&#
Norton,#2001).#Barsky#&#Bremser#(1999)#highlight#the#importance#of#moving#beyond#
lagging#indicators#in#order#to#create#long#term#value#creation.#
#
In#the#relevance#lost#debate,#Kaplan#(1984)#further#argued#that#old#accounting#systems#
can#distract#managers#from#the#reality#of#organizational#performance#and#argued#for#
change.#The#dissatisfaction#led#to#the#development#of#a#balanced#measurement#
framework#where#financial#and#nonfinancial#measures#are#combined#to#help#
organizations#succeed#in#competitive#environments#(Kaplan,#1984;#Bourne#et#al.,#2000).#
The#BSC#framework#retains#traditional#financial#measures#that#entails#information#about#
past#events#but#complements#them#with#nonPfinancial#measures#that#drive#future#
performance#(Kaplan#&#Norton,#1996).#The#benefits#of#not#solely#relying#on#financial#
measures#are#that#it#can#help#limit#short#termism#that#could#potentially#come#in#conflict#
with#the#long#term#goals#of#the#organization.#As#the#four#perspectives#of#the#scorecard#
(financial,#customer,#internal#business#process,#learning#and#growth)#are#developed#
from#the#organization's#vision#and#mission,#critical#success#factors#(CSF)#can#be#
determined#and#the#appropriate#measures#can#be#developed#(Kaplan#&#Norton,#1996;#
Anthony#et#al.,#2014).##
#
Although#PMS’s#are#widely#used,#measurement#initiatives#often#fail.#Neely#and#Bourne#
(2000)#argue#that#this#is#due#to#two#underlying#reasons:#the#measurement#system#is#
poorly#designed#and#that#is#difficult#to#implement.#Deciding#what#to#measure#is#a#process#
is#often#perceived#as#a#simple#task,#but#despite#this,#managers#often#choose#the#wrong#
measures#which#results#in#that#the#PMS#is#almost#impossible#to#implement#(Neely#et.#al.,#
1995;#Neely#&#Bourne,#2000).#A#strong#consensus#among#researchers#within#the#field#is#
that#measures#need#to#be#strategically#aligned,#thus,#derived#from#the#organization's#
strategy#(Lynch#&#Cross,#1995;#Wisner#&#Fawcett,#1991;#Bungay#&#Goold,#1991;#Bourne#
et#al.,#2000).#Using#a#success#map,#a#cause#and#effect#diagram#can#be#constructed#in#order#
to#understand#how#the#organization#operates#and#thus#develop#measures#that#are#
strategically#aligned.#Failing#to#understand#the#importance#of#the#success#map#in#many#

! 4#
!
cases#leads#to#that#its#users#question#the#validity#of#the#measures#since#do#not#reflect#the#
organization's#priorities#(Neely#&#Bourne,#2000).#Further,#after#the#process#of#finding#
the#appropriate#set#of#measures,#the#implementation#of#the#measure#initiative#often#
faces#challenges.#Neely#and#Bourne#(2000)#highlights#the#political#aspect#as#one#of#the#
reasons#for#why#the#implementation#of#measures#fail.#Depending#on#how#the#measures#
are#developed,#they#can#either#be#perceived#as#enabling#of#the#users#work#or#as#a#control#
device.#This#is#discussed#by#Wouters#&#Wilderom#(2008)#who#argue#that#an#incomplete#
PMS#arises#when#performance#measures#are#disaggregated#and#the#dependencies#of#the#
measures#are#not#reflected#in#the#PMS.#Further,#they#state#that#the#negative#perceptions#
towards#PMS#tend#to#rise#when#the#performance#metrics#are#perceived#to#be#inaccurate#
since#the#user’s#experience#that#their#performance#is#not#truthfully#reflected.#Issues#
concerning#that#the#users#experience#the#measures#as#a#threat#that#will#be#used#as#a#
management#tool#to#pin#out#poor#performance#can#harm#the#implementation#process.#
This#can#eventually#lead#to#that#the#users#becomes#too#concerned#about#how#to#deliver#
the#right#number#than#focusing#on#their#actual#performance#(Wouters#&#Wilderom,#
2008).#Neely#&#Bourne#(2000)#illustrates#this#by#an#example#from#a#call#center#where#
the#support#agents#are#measured#on#how#long#it#takes#to#answer#the#phone.#The#service#
agents#pick#up#the#phone#and#put#it#back#down#again#while#finishing#the#ongoing#
conversation,#avoiding#the#issue#of#not#answering#within#the#preferred#timeframe.#The#
political#aspect#is#further#discussed#by#Bourne#et#al.#(2000)#who#emphasizes#the#
importance#of#creating#measures#that#drives#the#right#behavior#that#will#support#the#
strategy.##

2.2'Performance'measurement'systems'in'service'organizations'
As#the#previous#section#indicates,#PMS#comes#with#great#benefits#but#also#major#
challenges.#Measuring#performance#can#be#challenging#in#any#type#of#organization,#but#it#
can#be#even#more#complicated#in#service#organizations#due#to#an#absence#of#inventory,#
quality#control#difficulties#and#that#they#are#labor#intensive#(Anthony#et#al.#2014).#
Marciniak#(2013)#and#Likierman#(2006)#emphasize#how#all#organizations#are#in#need#of#
a#wellPfunctioning#PMS.#However,#they#argue#that#PMS#can#be#even#more#important#for#
service#organizations#in#order#to#reconcile#increased#demand#with#efficiency#savings.#
Further,#measuring#performance#in#an#internal#service#function#is#of#even#higher#
importance#in#order#to#prove#their#existence#towards#the#executives#(Marciniak,#2013).##
#
! 5#
!
One#of#the#strongest#influential#forces#in#management#control#and#accounting#has#been#
the#need#to#quantify#work#in#progress#and#production#of#finished#goods#inventory.#
Modell#(1996)#argue#that#this#is#due#to#that#management#control#theory#has#mainly#been#
developed#from#a#manufacturing#organization#perspective.#Therefore,#research#in#
management#control#has#tended#to#view#service#organizations#as#“special”#control#
situations#and#compared#them#to#the#norm,#i.e.#control#situations#in#manufacturing#
organizations#(Modell,#1996).#The#difference#between#managing#services#and#goods#is#
discussed#by#Bowen#and#Ford#(2002).#Compared#to#manufacturing#organizations,#
service#organizations#produces#intangible#goods#that#are#characterized#as#being#
perishable#since#they#cannot#be#stored.#Since#the#goods#cannot#be#stored,#they#are#not#
produced#until#demand#occurs#which#leads#to#that#production#and#consumption#often#is#
simultaneous.#Further,#Bowen#and#Ford#(2002)#describes#how#heterogeneity#is#another#
characteristic#of#managing#services#since#the#service#often#is#a#result#of#a#specific#
demand#and#produced#based#on#the#specific#needs#of#the#customer.#This#is#further#
discussed#by#Dominiak#and#Louderback#(1985)#who#argue#that#the#reason#for#the#lack#of#
a#definable#measure#is#because#there#rarely#are#any#standard#products#produced.#Thus,#
the#quality#of#the#service#is#subjective#dependent#on#the#person#evaluating#it#which#
makes#it#difficult#to#measure#(Bowen#&#Ford,#2002;#Modell,#1996;#Anthony#et#al.,#2014).##
#
Grönroos#and#Ojasalo#(2004)#discuss#the#dilemma#of#balancing#costs#and#revenue#in#
service#organizations.#They#argue#that#it#is#difficult#since#the#interrelationship#between#
productivity#and#quality#always#need#to#be#considered.#This#is#due#to#that#within#a#
service#organization#context,#activities#of#cost#control#in#the#input#of#resources#may#
result#in#that#the#quality#if#the#service#decreases.#Thus,#being#more#cost#effective#does#
not#necessarily#result#in#a#positive#change#of#service#quality#(Grönroos#&#Ojasalo,#2004).#
In#their#research,$Jääskeläinen,$Laihonen$and$Lönnqvist$(2014)$identified$that$using$
customerPoriented#measurements#is#crucial#in#service#organizations.#This#is#due#to#the#
fact#that#a#service#often#is#a#simultaneous#process#between#service#provider#and#
customers.#Therefore,#external#efficiency,#i.e.#how#the#quality#of#the#service#is#perceived#
by#the#customer#need#to#be#considered#when#measuring#the#performance#of#a#service#
organization#(Grönroos#&#Ojasalo,#2004).#However,#the#input#from#customer#should#be#
used#to#a#wider$extent$than$just$measuring$the$satisfaction$aspect.$In$order$to$create$

! 6#
!
more%accurate%customer%oriented%measures,%involving%customers%in%defining%
performance*criteria*could*improve*the*quality*of*services*(Jääskeläinen*et*al.,*2014).*#

2.3'Key'Performance'Indicators'
In#a#PMS,#metrics#are#used#to#measure#performance.#Eckerson#(2009)#distinguish#
between#metrics#and#KPIs.#The#difference#between#these#two#is#that#metrics#measure#
business#activity#whereas#a#KPI#is#a#quantifiable#metric#that#embodies#a#strategic#
objective#and#measures#an#organization's#performance#against#a#goal#(Eckerson#2009:#
Parmenter,#2015).#The#goals#or#targets#associated#with#the#KPI#are#derived#from#the#
organization's#strategy#and#the#targets#are#often#measured#against#a#benchmark,#such#as#
last#year’s#output#or#results#(Eckerson,#2009).#Setting#targets#that#are#challenging#and#
specific#has#a#positive#impact#on#employee#motivation#and#performance#(Locke#&#
Latham,#2002;#Latham#&#Locke,#2006).#Previous#studies#show#that#if#employees#are#
committed#to#a#goal,#they#are#likely#to#increase#their#performance#if#there#is#an#
indication#that#they#are#below#target#(Latham#&#Locke,#2006).#Defining#clear#targets#that#
reflect#the#desired#outcome#makes#it#easy#to#assess#performance#using#metrics#such#as#
KPIs#(Ordóñez,#Galinsky#&#Bazerman,#2009).###
#
A#KPI#represents#the#very#core#of#the#organization#and#entails#what#to#do#increase#the#
organizational#performance#effectively#(Parmenter,#2015).#Kaplan#&#Norton#(1996)#
distinguish#KPIs#as#outcomes#or#drivers,#where#outcome#KPIs#tend#to#be#lagging#as#they#
indicate#the#outcome#of#a#activity#whereas#a#drivers#measures#an#activity#in#its#current#
state.#They#further#argue#that#it#is#important#to#have#a#mix#of#outcomes#and#drivers#as#
they#complement#each#other#P#if#outcomes#exist#without#drivers,#there#is#no#
communication#concerning#how#the#outcomes#should#be#reached#(Kaplan#&#Norton,#
1996).#Further,#combining#drivers#with#outcomes#also#provides#an#indication#if#the#
strategy#is#implemented#successfully.#This#is#exemplified#by#Kaplan#&#Norton#(1996)#
who#argue#that#only#using#drivers,#such#as#defect#rates,#will#enable#the#users#to#achieve#
short#term#goals#but#will#fail#to#reveal#if#improvements#in#defect#rates#has#an#effect#on#
financial#performance.##
#
For#a#performance#measure#to#be#a#KPI#it#needs#to#be#connected#to#one#or#more#of#the#
organization's#CSFs#as#well#as#being#linked#to#the#organization's#strategic#objectives.#
Kaplan#and#Norton#(2006)#puts#emphasis#on#the#importance#building#KPIs#from#an#
! 7#
!
organization's#vision,#mission#and#strategy#because:#it#creates#a#shared#understanding#
for#where#the#organization#strives#to#be#in#the#future;#the#employees#see#how#they#
contribute#to#organizational#success#and#it#creates#a#linkage#between#individual#
performance#and#strategic#objectives.#Parmenter#(2015,#p.#199)#defines#CSF#as#“the#list#
of#issues#or#aspects#of#organizational#performance#that#determine#ongoing#health,#
vitality#and#wellbeing”.#Rockart#(1979)#further#defines#CSF#as#a#limited#number#of#areas#
that,#if#they#produce#satisfactory#results,#will#secure#a#successful#and#competitive#
performance#of#the#organization.#The#CSF#areas#must#receive#careful#attention#from#the#
management#and#the#activities#should#be#measured#continuously#and#made#available#for#
the#employees#to#see#(Rockart,#1979).#Thus,#the#benefits#of#understanding#the#
organization's#CSF#are#that#they#help#to#identify#KPIs#since#they#identify#the#most#critical#
activities#for#success.#This#leads#to#that#employees#will#know#what#activities#they#need#to#
prioritize#and#their#activities#will#be#linked#to#the#organization's#strategy#(Parmenter,#
2015).##
#
Many#organizations#use#KPIs#but#find#that#they#have#little#or#no#effect#on#performance.#
This#is#in#many#cases#due#to#that#KPIs#often#are#developed#without#the#proper#
preparation#(Parmenter,#2015).#According#to#Powell#(2004),#there#is#still#a#tendency#that#
organizations#measure#the#organizational#aspects#that#are#easy#to#measure#as#well#that#
they#often#measure#too#much.#Previous#research#has#discussed#important#key#aspects#
when#creating#effective#KPIs#(Eckerson,#2009;#Kerzner,#2013;#Parmenter,#2015;#Wouters#
&#Wilderom,#2008).#Building#on#previous#studies,#five#characteristics#of#effective#KPIs#
have#been#identified.#
#

2.4'Characteristics'of'effective'KPIs'

2.4.1'Sparse'
The#common#saying#“the#fewer#the#better”#applies#when#creating#KPIs.#Previous#studies#
puts#emphasis#on#that#reporting#on#a#large#number#of#measures#is#both#time#and#
resource#consuming#(Chan,#2004;#Eckerson,#2009).#The#issues#that#arise#from#using#an#
extensive#number#of#measures#are#elaborated#in#a#report#from#EY#(2014)#where#it#is#
argued#that#a#large#number#of#KPIs#can#lead#to#difficulties#concerning#strategic#
alignment.#Therefore,#using#too#many#KPIs#can#be#counterproductive#as#it#dilutes#

! 8#
!
attention#away#from#the#most#important#activities#of#the#organization#(Chan,#2004;#
Eckerson,#2009).#
#
Davenport#(2001)#discusses#the#problem#of#attention#creation#due#to#information#
overload.#Much#energy#and#focus#in#today’s#organizations#is#devoted#towards#
implementing#new#information#systems#in#order#to#generate#knowledge.#However,#the#
effectiveness#of#information#and#knowledge#initiatives#are,#according#to#Davenport#
(2001)#highly#dependent#on#that#someone#is#paying#attention#to#it.#Yet,#many#
organizations#fail#in#helping#employees#to#allocate#their#attention#towards#the#important#
aspects#of#the#information#gathered.#Chewing#and#Harrell#(1990)#claim#that#information#
overloads#can#have#implications#on#individual#performance.#They#state#that#information#
overload#will#generally#have#a#negative#effect#on#decision#making.#The#negative#aspects#
of#information#overload#are#further#discussed#by#Jackson#and#Farzaneh#(2012)#who#
argue#that#it#can#have#negative#effects#on#productivity,#learning#and#innovation.#In#line#
with#the#saying#‘what#gets#measured#gets#managed’,#KPIs#can#be#used#as#a#tool#to#create#
attention#towards#reaching#strategic#targets#(McAfee#&#Brynjolfsson,#2012;#Davenport#&#
Beck,#2000).#Hence,#using#an#extensive#number#of#KPIs#can#eventually#lead#to#a#decrease#
of#performance#as#the#users#fail#to#focus#their#attention#due#to#information#overload.#
#
The#recommendations#concerning#the#appropriate#number#of#KPIs#are#discussed#by#
Hope#and#Fraser#(2003)#who#argues#that#no#more#than#ten#KPIs#should#be#used.#
Eckerson#(2009)#argue#that#people#does#not#have#the#ability#to#focus#on#more#than#five#
to#seven#items#at#once#and#that#the#number#of#KPIs#should#be#limited#to#that#range.#
Overall,#the#benefits#of#focusing#on#a#smaller#number#of#KPIs#is#that#it#enables#the#users#
to#understand#the#drivers#behind#the#KPI#on#a#deeper#level#and#enables#a#measurement#
system#that#focuses#on#what#performance#actually#matters#(Parmenter,#2015).##
#
Not#only#does#a#limited#number#of#KPIs#foster#increased#strategic#focus,#it#also#enables#
the#organization#to#be#flexible#in#their#development#of#KPIs#(Eckerson,#2009).#Using#a#
limited#number#of#KPIs#makes#it#easier#for#the#organization#to#adapt#the#KPIs#to#changes#
in#the#organization's#business#environment#over#time.#This#is#further#supported#by#
Parmenter#(2015,#p.#77)#who#highlights#that#it#is#crucial#to#“refine#the#performance#
measures#constantly#by#‘peeling#more#layers#off#the#onion’.#In#time,#a#clearer#hierarchy#

! 9#
!
of#measures#will#develop,#some#will#be#discarded,#and#new#measures#will#start#emerging#
that#will#have#profound#impact#on#the#organization’s#future”.#

2.4.2'Simple'
The#users#of#the#KPI#need#to#understand#what#is#being#measured#and#how#the#
measurement#is#carried#out,#hence#understanding#how#the#KPI#is#calculated#(Merchant,#
2006).##If#the#users#understand#how#the#KPI#is#calculated,#they#will#understand#the#
underlying#reason#to#why#it#scores#a#certain#number#(Wouters#&#Wilderom,#2008).#Thus,#
having#simplicity#in#mind#when#creating#KPIs#in#a#service#organization#is#crucial#due#to#
the#complexity#of#measuring#intangible#goods#(Martinsons,#Davison#&#Tse,#1999;#
Reginald#2013)#it#is#suggested#that#the#metrics#should#consist#of#two#to#three#variables#
that#are#as#closely#related#to#the#actual#metric#as#possible.#This#enables#the#users#to#draw#
conclusions#about#how#to#influence#the#KPI#(Eckerson,#2009;#Kerzner,#2013).#In#the#ideal#
organization,#every#employee#on#any#position#understands#the#organizational#strategy#
from#which#the#KPI#is#derived#from#and#how#to#influence#it#in#their#daily#work.#If#not,#the#
KPI#loses#much#of#its#value#(Merchant,#2006).#
#
However,#it#is#not#uncommon#that#organizations#use#KPIs#that#are#complex#and#not#
understood#by#its#users#(Reginald,#2013).#If#the#users#lack#understanding#of#the#meaning#
of#the#KPI,#they#will#not#know#how#to#influence#it#(Eckerson,#2009;#Reginald,#2013).#To#
create#understanding,#the#users#need#continuous#education#and#training#concerning#the#
background#and#content#of#the#KPIs#to#understand#how#they#can#be#influenced#(Kaplan#
&#Norton,#2006;#Kertzner,#2013).#Wouters#and#Wilderom#(2008)#discuss#this#in#terms#of#
internal#transparency#and#stress#the#fact#that#the#user’s#needs#to#have#a#good#
understanding#of#the#logic#behind#the#KPI#and#information#about#its#status.#When#the#
users#understand#the#driver#behind#the#KPIs,#they#can#direct#their#efforts#in#the#desired#
direction#and#and#consequently#use#the#KPIs#as#feedback#and#thus#increase#the#
performance#of#the#organization#(Eckerson,#2009).#
#
To#make#sure#that#the#KPIs#will#be#integrated,#used#and#understood#in#the#daily#business#
it#is#crucial#to#have#followPup#sessions#with#the#users.#Hence,#for#the#KPIs#to#be#perceived#
by#the#users#as#simple,#they#need#to#be#communicated#in#a#way#that#is#easy#to#interpret.#
Data#visualization#has#gained#attention#during#recent#years#as#a#response#to#the#increase#
of#information#flows.#The#concept#of#using#dashboards#has#become#a#popular#tool#to#
! 10#
!
visualize#data#in#an#understandable#and#accessible#format#(Parmenter,#2015;#Eckerson,#
2009;#Jones,#Cournane,#Sheehy#&#Hederman,#2016).#Using#dashboards#enables#the#users#
of#the#KPIs#to#instantly#know#whether#their#performance#is#on#track#or#not#(Eckerson,#
2009).#The#characteristics#of#a#good#performance#dashboard#is#further#discussed#by#
Eckerson#(2009)#who#states#that#attributes#such#as#status#and#trend#contribute#to#
valuable#insight#about#the#current#state#of#the#KPI.#He#claims#that#status#is#of#importance#
as#it#indicates#the#status#of#the#KPI#in#relation#to#the#target#whereas#the#trend#attribute#
signals#its#movements.#The#dashboards#can#also#make#use#of#historic#KPI#data#to#provide#
a#retrospective#analysis#which#can#be#used#to#make#predictions#about#future#demands#
and#thus#provide#important#signals#to#the#users#(Jones,#Cournane,#Sheehy#&#Hederman,#
2016).#

2.4.3'Actionable'&'Owned'
Users#of#KPIs#need#to#know#how#to#affect#the#outcome#of#the#metrics,#if#the#KPI#shows#a#
negative#trend#the#user#should#know#how#to#influence#it#in#order#to#improve#it.#Making#a#
KPI#actionable#involves#consideration#of#the#analytical#literacy#of#the#employees#
according#to#Eckerson#(2009)#and#Chan#(2004).#Chan#(2004)#puts#emphasis#on#how#an#
organization#consists#of#different#personalities#with#different#competences#and#that#not#
everyone#is#used#to#analyze#numbers#and#ratios.#Thus,#education#concerning#result#
interpretation#and#establishing#understanding#for#how#to#act#when#a#KPI#shows#a#
negative#trend#is#important,#especially#for#new#employees.#This#enables#the#employees#
to#take#action,#and#most#importantly#to#take#the#right#action#(Eckerson,#2010).#
#
Unfortunately,#many#organizations#underestimate#the#importance#of#developing#
actionable#KPIs#according#to#Eckerson#(2009).#Merchant#(2006)#discuss#this#issue#in#
terms#of#controllability#and#argues#that#the#users,#whose#behaviors#are#influenced#by#the#
KPI,#need#to#be#able#to#take#action#on#it.#This#implies#that#if#the#users#are#unable#to#take#
action#on#the#KPI,#the#metric#is#not#a#truthful#reflection#of#how#the#users#perform.#Thus,#
if#a#KPI#is#uncontrollable,#the#metric#will#not#provide#any#information#about#the#user's#
performance#(Merchant,#2006).#This#is#further#discussed#by#Wouters#&#Wilderom#
(2008)#who#states#that#negative#perceptions#towards#PMS#as#a#whole#tend#to#rise#when#
performance#metrics#are#perceived#to#be#inaccurate.#The#feelings#of#inaccuracy#are#due#
to#that#the#user’s#experience#that#the#KPI#is#not#a#truthful#reflection#of#their#performance.#
This#can#lead#to#a#number#of#issues#such#as#that#the#users#take#operational#decisions#just#
! 11#
!
to#make#the#metric#look#good#in#the#eyes#of#the#management#(Wouter#&#Wilderom,#
2008).#Thus,#developing#KPIs#that#help#users#to#better#master#their#task#is#important#for#
the#KPI#to#be#perceived#as#enabling#of#their#work.#
#
Creating#actionable#metrics#involve#ownership,#all#KPIs#needs#an#owner#who#is#held#
accountable#for#its#outcome#(Kertzner,#2013).#Assigning#responsibility#for#the#KPI#to#an#
individual#or#a#group#can#motivate#ownership.#The#opinions#whether#the#owner#should#
be#a#single#individual#or#a#group#go#two#ways.#One#argument#for#having#one#single#owner#
is#that#it#minimizes#the#risk#of#finger#pointing,#since#the#owner#is#the#one#being#held#
responsible#for#the#KPI.#However,#having#a#group#as#an#owner#can#favor#teamwork#
across#the#organization#(Eckerson,#2009).#Even#if#the#KPI#has#a#single#or#multiple#owners#
accountability#need#to#be#established,#otherwise#measurements#are#meaningless#
(Eckerson,#2010;#Kerzner,#2013;#Parmenter,#2015).#Organizations#with#hierarchical#
structures#often#face#issues#concerning#accountability.#If#the#delegation#of#authority#is#
limited,#a#user#can#be#held#accountable#for#the#KPI#but#not#have#the#authority#to#take#
action#on#it#(Eckerson,#2009).#Furthermore,#Jakobsen#and#Lueg#(2014)#claim#that#an#
actor#should#only#be#accountable#for#the#actions#that#he#or#she#can#act#on.#If#someone#is#
accountable#for#something#that#cannot#be#controlled#can#lead#to#decreased#motivation#
and#stress.#They#argue#that#if#an#area#is#not#controllable#it#is#wrong#to#assume#that#
actions#the#taken#by#the#accountable#manager#will#lead#to#improved#results.#

2.4.4'Involvement'
PMS#are#often#developed#from#the#perspective#of#upper#management.#However,#topP
down#PMS#initiatives#are#less#likely#to#be#successful#according#to#Wouters#and#Wilderom#
(2008).#This#is#because#it#does#not#take#the#experience#and#unique#expertise#of#the#
employees#into#consideration.#Further,#the#topPdown#approach#might#miss#to#identify#
any#informal#measurement#initiatives#that#might#already#be#in#use#(Wouter#&#Wilderom,#
2008).#Therefore,#a#collaborative#approach#between#executives,#managers#and#workers#
should#be#used#when#developing#the#appropriate#KPIs.#This#enables#the#KPIs#to#be#more#
accurate#as#it#captures#locally#developed#expertise#but#also#increases#the#probability#that#
the#KPIs#will#be#of#better#support#in#their#work#(Eckerson,#2009;#Wouters#&#Wilderom,#
2008).#Kerzner#(2013)#supports#the#importance#of#that#the#users#should#set#KPIs#
collectively#and#Kaplan#&#Norton#(2001)#further#claim#that#one#of#the#reasons#to#why#
organizations#fail#to#implement#KPIs#successfully#is#because#too#few#individuals#are#
! 12#
!
involved.#An#involvement#from#the#employees#is#likely#to#have#an#positive#effect#on#both#
the#attitude#and#the#technical#outcomes#(Wouters#&#Wilderom,#2008).#However,#it#is#not#
only#important#that#the#users#of#the#measurement#are#involved#in#the#development#
process.#Keyes#(2005)#argue#that#a#successful#development#of#KPIs#that#will#be#used#by#
the#workers#also#require#senior#management#involvement.#Without#an#active#and#visible#
involvement#from#top#management#in#the#process#of#developing#KPIs,#the#users#will#not#
view#it#as#an#important#activity.##
#
A#KPI#can#be#viewed#as#collection#of#data#that#has#been#transformed#into#information#as#
it#has#meaning,#relevance#and#purpose#and#is#communicated#through#text#or#numbers.#
Thus,#the#difference#between#data#and#information#is#that#information#has#meaning#
(Davenport,#2005).#Further,#knowledge#is#created#when#the#information#is#made#useful.#
As#information#flows#in#organizations#increase,#the#allocation#of#attention#becomes#an#
important#management#tool.#KPIs#can#be#an#important#tool#to#create#attention#towards#
the#organizations#CFS,#however#measures#do#not#provide#any#action#by#themselves#
(Zack,#1999).#Zack#(1999)#argues#that#attention#can#be#viewed#as#allocating#the#right#
information#and#giving#it#to#a#user#in#order#to#generate#knowledge.#In#order#for#the#
information#that#the#KPI#provides#to#be#turned#into#action,#attention#must#be#directed#
towards#the#importance#of#using#the#KPIs.#Thus,#involvement#becomes#a#question#
concerning#attention#creation.#Giving#timely#feedback#on#the#KPIs#can#reward#
motivational#reinforcement#and#thus#direct#attention.#Further,#timey#feedback#also#
increases#the#likelihood#that#the#users#will#find#new#and#creative#ways#to#increase#their#
results#(Wouters#&#Wilderom,#2008).#A#focus#on#holding#regular#meetings#to#review#the#
KPIs,#encourage#the#users#to#come#up#with#new#ideas#of#how#the#process#can#be#
improved#and#also#follow#up#on#these#suggestions#are#important#aspects#in#creating#
involvement#(Keyes,#2005).#

2.4.5'Correlated'
KPIs#should#help#the#users#to#make#decisions#that#help#the#organization#move#in#the#
right#strategic#direction.#As#business#environments#continuously#change,#organizations#
need#to#adapt#their#strategies#and#thus#develop#their#KPIs#for#them#to#stay#strategically#
aligned#(Eckerson,#2009).#Thus,#for#motivational#reasons,#KPIs#alignment#to#strategy#is#
an#essential#metric#characteristic.#This#is#discussed#by#Merchant#(2006)#who#argues#that#
if#the#KPIs#are#not#a#reflection#of#the#progress#towards#the#desired#result,#motivating#the#
! 13#
!
users#to#perform#in#order#to#improve#the#metric#will#be#unproductive.#This#is#due#to#the#
fact#that#if#the#KPI#is#not#correlated#to#strategy,#there#is#a#risk#that#it#motivates#the#wrong#
actions.#An#example#of#this#is#illustrated#by#Merchant#(2006,#p.#895)#who#means#that#if#a#
manager#is#measured#on#shortPterm#value#maximization#which#is#not#correlated#to#longP
term#value#maximization,#behaviors#that#boost#short#term#profits#such#as#cutting#R&D#
investments#are#done#on#the#expense#of#the#organization's#long#term#strategic#goals.#
Therefore,#cause#and#effect#becomes#important#when#developing#KPIs.#A#properly#
constructed#KPI#should#tell#a#story#of#the#organization's#strategy#through#cause#and#
effect#relationships#(Kaplan#&#Norton,#2006).#Thus,#considering#cause#and#effect#when#
determining#what#KPIs#are#useful,#starts#with#defining#the#strategic#objectives#and#then#
determining#what#factors#that#will#enable#the#organization#to#reach#those#objectives#
(Mauboussin,#2012).##
#
Eccles#(1991)#discusses#the#philosophy#of#performance#measurements#as#an#ongoing#
changing#process.#As#the#practices#within#organizations#continuously#change,#it#is#crucial#
that#the#measurement#systems#support#and#adapts#to#these#changes.#Due#to#this,#
Wouters#and#Wilderom#(2008)#advocate#the#use#of#measures#for#quality,#throughput#
times#and#flexibility.#According#to#Parmenter#(2015),#KPIs#need#to#be#continuously#
maintained#to#remain#relevant#and#be#effective.#However,#the#use#of#KPIs#have#been#
criticized#as#it#could#be#challenging#to#break#down#the#strategy#into#KPIs#that#are#easily#
understood#(Catasus,#Görjer,#Högbers,#Johrén,#2008).#In#relation#to#this,#Kaplan#and#
Norton#(2006)#discuss#three#mechanisms#of#aligning#the#organization#to#the#vision#and#
strategy,#which#could#be#a#way#of#dealing#with#this#problem.#First,#communication#and#
education#programs#must#be#put#in#place#to#educate#the#organization#about#the#strategy#
and#what#behaviors#that#will#contribute#to#that#the#organization#will#reach#its#strategic#
objectives.#It#can#be#approached#as#an#internal#marketing#campaign#with#the#goal#to#
create#awareness#and#interest.#However,#it#is#crucial#to#follow#up#in#the#communication#
and#education#programs#so#it#is#not#treated#as#any#other#announcement.#Second,#
translation#of#strategy#into#measurements#can#be#done#through#GoalPSetting#programs#
and#lastly#a#reward#system#linkage#should#be#established#so#that#the#alignment#towards#
the#strategy#is#motivated#(Kaplan#&#Norton,#2006).#By#continuously#evaluating#the#
correlation,#it#will#enable#change#and#create#understanding#of#how,#or#if,#the#KPI#really#
reflect#the#strategy#(Eckerson,#2009).#Using#the#organization's#vision#to#paint#a#picture#of#

! 14#
!
where#it#wants#to#be#in#the#future#with#the#help#of#using#KPIs#can#be#useful#to#empower#
the#employees#to#contribute#to#the#strategic#goals.#Emotional#drivers#such#as#illustrating#
how#the#KPIs#can#contribute#to#that#the#employee's#work#will#be#more#rewarding#and#
effective.#By#marketing#the#KPIs,#the#organization's#commitment#towards#them#will#be#
stronger#(Parmenter,#2015).##
#
According#to#Wouters#and#Wilderom#(2008)#it#is#important#to#experiment#and#try#new#
KPIs#continuously#in#order#to#find#the#appropriate#measurement#to#fit#the#organization’s#
strategic#goals.#However,#creating#a#measurement#that#is#appropriate#for#its#purpose,#it#
needs#to#be#tested,#evaluated#and#refined#in#terms#of#definition,#required#data,#IT#tools#
and#how#it#is#presented#to#the#users.#Furthermore#Wouters#and#Wilderom#(2008)#
highlight#the#fact#that#creating#specific#performance#measurements#can#be#a#confusing#
process#as#it#involves#several#different#aspects#that#needs#to#be#taken#in#consideration.#
Not#only#do#the#measures#need#to#reflect#the#strategic#goals#of#the#organization,#the#
proper#data#must#also#be#available.#If#the#data#required#for#the#KPIs#is#not#available#or#
structured,#the#process#of#cleaning#and#validating#the#data#can#be#a#long#and#complicated#
process#(Eckerson,#2009).#Neely#and#Bourne#(2000)#also#discuss#this#issue#in#terms#of#
infrastructural#issues.#To#gather#the#data#on#which#the#measures#are#based#is#a#time#
consuming#and#difficult#process#that#often#is#undermined#by#management.#Thus,#data#
access#becomes#an#important#aspect#concerning#the#development#of#KPIs.#Furthermore#
it#is#important#that#all#the#KPIs#that#are#being#used#complement#each#other.#If#the#KPIs#
are#coupled#or#correlated#to#each#other,#it#may#lead#to#a#situation#where#improving#one#
KPI#may#undermine#the#performance#of#another#(Cai,#Liu,#Xiao#&#Liu,#2009)#which#may#
affect#the#the#relation#between#the#KPIs#and#the#strategic#alignment.#This#issue#is#called#
sub#optimization#and#can#be#avoided#if#the#KPIs#are#devised#within#a#larger#context#
where#imbalances#can#be#discovered#(Eckerson,#2009).##

2.5'Summary'of'literature'review'
In#order#to#create#effective#KPIs#within#an#organization,#we#have#identified#five#criteria#
must#be#taken#into#consideration.#The#criteria#are#that#the#KPI#must#be#sparse,#simple,#be#
actionable/owned,#involvement#and#correlated.#Before#the#KPIs#can#be#developed,#the#
organization#must#have#a#wellPdefined#vision#and#strategy#as#well#as#have#identified#the#
CSF#(Eckerson,#2009;#Kaplan#&#Norton,#2006;#Merchant,#2006;#Parmenter,#2015).#Only#
then,#it#is#possible#to#create#effective#KPIs#that#are#strategically#aligned,#which#is#
! 15#
!
summarized#in#the#model#below.#The#review#indicates#that#there#are#major#challenges#to#
overcome#when#developing#KPIs,#especially#for#service#organizations#where#the#
delivered#service#is#intangible#and#more#complicated#to#assess#compared#to#tangible#
goods#(Bowen#&#Ford,#2002;#Grönroos#&#Ojasalo,#2004).#The#intangibility#of#the#benefit#
produced#from#a#provided#service#means#that#the#KPIs#need#to#be#under#constant#
supervision.#Thus,#the#KPIs#need#to#be#simple#to#understand#and#the#users#must#know#
what#variables#it#consists#of#in#order#to#influence#it.#However,#as#quantifying#intangibles#
for#intangible#services#is#difficult,#it#can#therefore#be#assumed#that#the#simple#
characteristic#can#be#challenging#for#a#service#organization#when#developing#KPIs.#If#the#
user#does#not#understand#the#driver#behind#the#KPIs,#the#users#will#find#that#the#metric#
is#difficult#to#influence,#hence,#the#KPI#is#not#actionable.#Further,#if#the#KPI#is#not#
actionable,#it#will#not#be#a#true#reflection#about#how#the#users#perform#which#essentially#
means#that#the#KPI#provides#little#or#no#value#and#performance#will#not#be#influenced#in#
the#desired#direction#(Eckerson,#2009;#Merchant,#2006).#However,#even#though#the#KPI#
is#not#actionable#someone#can#still#be#accountable#for#its#outcome#or#be#the#owner#of#the#
KPI.#Thus,#it#can#further#be#assumed#that#the#characteristic#of#actionable#and#owned#can#
become#extra#challenging#based#the#inherent#complexity#of#developing#KPIs#in#a#service#
organization.#Designing#an#appropriate#PMS#is#a#complex#process#especially#in#regards#
to#how#performance#metrics,#such#as#KPIs,#should#be#developed.#In#this#thesis#five#
characteristics#of#effective#KPIs#have#been#highlighted#based#on#previous#research.#
However,#it#is#important#to#acknowledge#that#there#may#exist#other#characteristics#that#
are#important#for#a#service#organization#when#developing#KPIs.##
#

! 16#
!
 3. Methodology'
In!this!chapter,!the!methodological!approach!of!the!study!is!presented!in!order!to!provide!
an!understanding!of!how!the!study!was!conducted.!The!chapter!further!contains!a!
description!of!the!case!company!and!how!the!qualitative!and!quantitative!data!was!
collected.!The!chapter!is!concluded!with!a!description!of!the!data!analysis.!!

3.1'Research'approach'
The#aim#of#this#study#is#to#contribute#to#existing#research#by#addressing#how#criteria’s#
for#effective#KPIs#are#used#within#a#service#organization.#The#study#took#an#exploratory#
research#approach#as#we#sought#to#contribute#to#new#insights#and#understanding#within#
the#field#(Saunders,#Lewis#and#Thornhill,#2012).#Data#was#collected#in#order#to#explore#a#
phenomenon#and#identify#themes#and#patterns#of#how#a#service#organization#meets#the#
suggested#criteria#for#effective#KPIs.#Empirical#findings#were#analyzed#through#existing#
theories#and#contributed#with#new#insights,#thus,#the#study#took#an#abductive#approach#
(Saunders#et#al.,#2009).##
#
A#qualitative#research#design,#using#a#single#case#study,#was#carried#in#order#to#fulfill#the#
aim#of#the#study#by#conducting#interviews.#This#was#appropriate#since#we#aimed#to#
answer#a#‘how’#related#research#question#(Yin,#2003).#Further,#the#study#also#has#
qualitative#elements#as#data#was#gathered#through#a#survey.#The#single#case#study#
enabled#us#to#explore#how#KPIs#are#used#within#a#realPlife#context#and#was#a#suitable#
research#design#due#to#the#explanatory#nature#of#the#study#(Saunders#et#al.,#2009).#One#
of#the#strengths#of#conducting#a#single#case#study#is#that#it#enables#that#information#can#
be#gathered#from#multiple#types#of#resources#such#and#interviews#and#documents#
(Collins#&#Hussey,#2009).#Thus,#the#chosen#research#design#was#suitable#since#a#deep#
understanding#for#how#KPIs#are#used#within#the#case#company#was#required#(Collis#&#
Hussey,#2009;#Yin,#2003).##
#
Although#the#study#is#based#on#multiple#observations#in#the#form#of#interviews,#an#
obvious#drawback#of#conducting#a#single#case#study#is#that#the#results#are#difficult#to#
generalize#to#other#settings#(Bryman#&#Bell,#2007;#Wouters#&#Wilderom,#2008).#
However,#analytical#generalizations#can#be#drawn#from#the#study#as#it#contributes#to#
new#insights#to#existing#theories#(Yin,#2003).#Although#there#are#identified#drawbacks#of#

! 17#
!
the#chosen#method,#the#advantage#is#that#it#enabled#detailed#observations#(Wouters#&#
Wilderom,#2008).## #

3.2'The'Case'Company'–'Axfood'IT'
Axfood#IT#is#a#fully#owned#subsidiary#of#Axfood#Group.#Axfood#Group#is#a#Swedish#food#
retail#and#wholesale#business#that#owns#the#store#chains#Willy’s#and#Hemköp#that#
consists#of#a#total#of#263#stores#across#Sweden#and#820#collaborating#stores#under#the#
Hemköp#brand.#Axfood#Group#also#conducts#Business#to#Business#sales#through#
Snabbgross#and#handles#logistics,#purchasing#and#assortment#development#through#
Dagab#Inköp#&#Logistik#AB.#With#a#market#share#of#20#%,#Axfood#Group#is#the#second#
largest#organization#in#the#Swedish#food#retail#market.#The#organization#is#listed#on#
Nasdaq#Stockholm#AB’s#large#cap#list#where#Axel#Johnson#AB#is#the#principal#owner#with#
50,1#%#of#the#shares#(Axfood#1,#2017;#Axfood#2,#2017).#
#
Axfood#IT#consists#of#195#employees#and#had#a#revenue#of#717#MSEK#in#2016,#they#
operate#from#Axfood#Group's#headquarters#in#Stockholm,#Sweden#(Allabolag,#2017;#
Internal#document#1).#Further,#they#operate#and#maintain#23#offices#and#distribution#
centers#with#a#total#of#2950#workplaces#and#provide#computer#systems#network#
solutions#for#485#of#Axfood#Groups#stores.#The#systems#provided#consists#of:#
##
·###2500#checkout#systems#
·###2400#workplaces#
·###4100#personal#digital#assistants#(PDA)#
·###1700#inPstore#selfPcheckout#devices#
##
Further,#Axfood#IT#has#two#data#centrals#in#Stockholm,#1300#physical#servers,#200#
systems#and#performs#two#new#releases#per#year.#Axfood#IT’s#vision#is#to#be#“the#best#IT#
unit#in#the#industry”#and#their#main#responsibilities#towards#Axfood#Group#are:#
#
·###The#development#and#operation#of#all#IT#systems#
·###Deliver#an#effective#and#robust#IT#support#
·###Have#a#clear#prioritization#of#projects#and#management#based#on#business#value#
·###Contribute#to#the#development#of#processes#through#proactive#action#and#innovation#
·###Develop#and#manage#IT#infrastructure#
! 18#
!
·###Be#responsible#for#ongoing#operating#activities#of#operational#IT#services#
#
Axfood#IT#is#divided#into#two#different#business#units;#development#and#delivery,#with#
one#responsible#manager#for#each#department.#The#development#unit#consists#of#seven#
subunits:#release#and#test;#project#office;#group#functions;#store;#price#&#assortment;#
supply;#central#system#development.#The#delivery#unit#consists#of#the#following#subP
units:#IT#support;#user#platform;#operating#platform;#production#platform;#customer#
platform;#store#platform.#The#middle#managers#of#each#subunit#are#in#charge#of#
developing#detailed#plans#and#procedures#based#on#Axfood#ITs#overall#strategy#(Internal#
document).#
#

'
#

As#we#wanted#to#create#a#better#understanding#for#how#performance#measurements#are#
used#within#a#service#organization,#it#was#crucial#for#us#to#find#a#company#that#was#
willing#to#give#us#traditional#access.#Traditional#access#involves#facePtoPface#interactions,#
correspondence#and#access#to#records#of#data#through#internal#documents#(Yin,#2013).#
Axfood#IT#expressed#a#need#for#an#evaluation#of#their#KPIs,#they#had#a#strong#incentive#to#
give#us#access#to#the#data#needed#to#enable#such#evaluation.#Further,#the#case#study's#
research#question#was#thus#framed#from#existing#theory#and#Axfood#IT´s#expressed#
needs.#A#confidentiality#agreement#was#put#in#place#which#outlined#what#information#
should#be#restricted#to#third#parties.#This#was#done#in#order#to#create#a#confidentiality#

! 19#
!
relationship#between#us,#the#researchers,#and#Axfood#IT#to#protect#any#kind#of#
confidential#information#that#we#had#access#to.##

3.3'Data'Collection'
The#study#was#conducted#in#the#case#company´s#natural#setting#using#multiple#sources#
and#techniques#for#data#collection#(Collis#&#Hussey,#2009;#Yin,#2003).#The#primary#data#
was#obtained#through#internal#company#documentation,#an#online#survey#and#by#
interviews#held#with#management#and#middle#managers#at#Axfood#IT.#The#interviews#
were#scheduled#with#help#from#Axfood#IT#and#the#respondents#were#primarily#chosen#
since#they#have,#due#to#their#positions,#good#insight#into#Axfood#IT’s#operations.#Further,#
the#middle#managers#have#unique#insight#in#the#daily#operations#of#Axfood#IT#as#they#are#
managing#different#sub#areas#of#the#business.##
#
Gathering#data#through#surveys#and#facePtoPface#interviews#are#common#methods#when#
studying#topics#related#performance#measurement#(Hoque,#2014).#Secondary#data#was#
collected#through#the#company’s#website#and#internal#documentation.#By#gathering#data#
from#different#sources#we#could#combine#and#compare#it#in#order#to#make#sure#that#we#
gained#a#more#complete#and#nuanced#understanding#of#the#current#situation#at#Axfood#
IT.#Further,#using#multiple#sources#of#data#minimized#the#risk#of#getting#subjective#
findings#as#we#could#understand#the#situation#at#Axfood#IT#in#its#whole.###
#
In#order#to#link#survey#and#interview#questions#to#existing#theory#we#based#our#
questions#on#the#findings#from#previous#research.#The#interview#guideline#focused#on#
the#five#different#characteristics#of#effective#KPIs#that#were#identified#in#the#literature#
review.#The#survey#questions#and#the#interview#questions#together#capture#the#five#
criterias#of#how#effective#KPIs#are#developed#(see,#Appendix).#The#five#characteristics#
are#based#on#a#number#of#previous#studies#as#shown#in#the#literature.#However,#we#are#
aware#of#the#fact#that#the#characteristics#might#not#capture#all#aspects#of#how#KPIs#are#
used#within#Axfood#IT.##

3.3.1'PreMStudy'
In#the#initial#phase#of#the#study,#internal#documents#of#the#organizational#structure,#
management#systems#and#the#organizational#vision#was#gathered.#By#interpreting#this#
data#we#could#create#a#basic#understanding#of#the#structure,#activities#and#management#

! 20#
!
at#Axfood#IT.#We#also#had#access#to#the#company’s#monthly#reports,#which#were#useful#
when#collecting#the#information#needed.#In#these#reports#the#current#KPIs#were#
presented#but#due#to#of#confidentiality#reasons#we#cannot#publish#any#information#about#
the#specific#numbers#of#the#KPIs#or#specifics#of#how#the#KPIs#are#calculated.#
##
To#find#out#what#direction#the#study#was#going#to#take,#four#initial#facePtoPface#
interviews#with#the#CIO,#Development#Manager,#Delivery#Manager#and#HR#/#CFO#were#
carried#out.#A#semiPstructured#approach#was#chosen#as#it#allowed#us#to#go#into#detail#
when#it#was#needed#and#provided#a#deeper#understanding#of#the#respondent’s#answers#
as#the#respondent#had#the#opportunity#to#explain#the#reason#for#the#answer#(Saunders#et#
al.,#2012).#According#to#Bryman#and#Bell#(2007)#this#method#can#be#preferable#in#a#
situation#when#as#many#details#as#possible#sought#to#be#attained;#it#gave#the#opportunity#
to#ask#followPup#question#on#things#that#were#unclear#or#specifically#interesting#for#us.#
These#interviews#focused#upon#the#general#use#of#the#KPIs#within#Axfood#IT,#potential#
problems#and#identification#of#areas#of#improvement.##
#
Additionally,#a#survey#was#sent#out#to#management#and#middle#managers#at#Axfood#IT,#
where#17#out#of#20#completed#the#survey.#A#1P5#Likert#scale#was#used#to#obtain#the#
quantitative#data#in#the#survey.#A#likertPstyle#rating#scale#allowed#the#managers#to#
respond#how#strongly#they#agreed#or#disagreed#towards#seven#questions#about#the#KPIs#
used#at#Axfood#IT#(see#Appendix).#The#answering#possibility#of#the#likert#scale#was#
ranged#from#1#(strongly#agree)#to#5#(strongly#disagree).#This#type#of#rating#scale#allowed#
us#to#uncover#trends#and#degrees#of#opinions.#Using#an#uneven#number#on#the#likert#
scale#does#not#require#a#concrete#yes#or#no#answer#from#the#respondent.#Instead,#it#
allows#response#in#a#level#of#agreement#as#it#also#accommodates#a#neutral#answering#
option#(Saunders#et#al.,#2012).#
##
In#the#survey,#a#number#of#aspects#concerning#the#respondent’s#attitudes#towards#the#
current#KPIs#were#covered.#The#measurement#of#the#attitude#towards#the#KPIs#
(Appendix#1)#refers#to#the#willingness#to#use#the#KPIs#in#the#daily#work.#This#is#in#line#
with#earlier#research#carried#out#by#Wouters#and#Wilderom#(2008)#who#looked#at#
characteristics#of#a#development#process#of#a#PMS#and#investigated#how#it#could#be#
perceived#as#an#enabling#tool#for#employees,#rather#than#a#control#device.#Furthermore,#

! 21#
!
the#characteristics#of#effective#KPIs#(Eckerson,#2009;#Parmenter,#2015)#served#as#a#base#
for#the#survey#in#order#to#understand#how#the#characteristics#correlates#with#the#KPIs#
currently#used#at#Axfood#IT.#The#characteristics#of#spare#and#simple#were#easy#to#
discover#within#this#context#and#the#quantitative#data#also#provided#further#evidence#of#
the#attitude#towards#the#KPI#as#well#as#insights#of#how#they#are#constructed,#perceived#
and#used.#

3.3.2'Interviews'
After#we#received#the#data#from#the#survey#we#designed#the#questionnaire#for#the#
interviews#held#with#the#management#and#middle#managers#at#Axfood#IT.#The#interview#
guideline#(see#table#1)#was#based#on#the#information#sought#from#the#prePstudy#and#the#
literature#review.#Twelve#questions#were#constructed#in#order#to#capture#how#the#KPIs#
at#Axfood#IT#met#the#suggested#criteria#for#developing#effective#KPIs.#We#used#a#semiP
structured#approach#and#questions#were#of#an#open#character#as#we#wanted#to#
encourage#the#respondents#to#define#and#describe#the#situation#using#their#own#thoughts#
and#ideas#without#influencing#their#answers.#The#abductive#approach#helped#to#establish#
a#link#between#the#study#and#existing#knowledge#within#the#field#(Saunders#et#al.,#2012).##
#

! 22#
!
#

The#interviews#were#held#at#Axfood#Group´s#headquarters#in#Stockholm#and#took#
approximately#thirty#minutes#each.#Further,#all#interviews#were#recorded#with#approval#
from#the#respondents.#The#respondents#were#also#informed#that#their#answers#would#
anonymous#serve#as#base#for#the#empirical#material#of#this#study.#Out#of#a#total#of#twenty#
managers#we#were#able#to#conduct#fifteen#facePtoPface#interviews#and#two#phone#
interviews.#The#interviews#typically#started#with#a#section#where#the#respondent#shortly#
described#his#or#her#role#at#Axfood#IT,#how#long#they#have#held#their#current#position#
and#for#how#long#they#had#been#within#the#company.#We#used#the#twelve#questions#as#a#
guideline#for#the#interview#and#ensure#that#all#the#desired#information#was#gathered#
(Saunders#et#al.,#2015).#However,#the#respondents#were#encouraged#to#use#their#own#
words#to#describe#the#situation.#This#structure#was#preferable#as#it#is#flexible#and#
allowed#us#to#get#into#detail#and#ask#further#questions#outside#the#original#interview#

! 23#
!
questions.#It#also#contributed#to#an#open#dialogue#where#the#respondent#delivered#wellP
founded#answers#on#the#questions.#If#the#respondent#started#to#discuss#other#aspects#
that#were#not#exactly#in#line#with#our#purpose#we#listened#to#see#how,#or#if,#the#data#
could#contribute#to#our#research.#The#anonymity#of#the#respondents#helped#to#minimize#
the#risk#of#dishonesty#and#consequently#increase#the#validity#of#the#study#(Bryman#&#
Bell,#2007).#Since#we#were#not#able#to#interview#all#middle#managers,#this#might#cause#
potential#limitations#as#we#did#not#get#the#complete#picture.#However,#after#conducting#
the#interviews#we#got#the#indication#that#the#answers#were#overall#pointing#towards#the#
same#direction,#suggesting#that#the#data#from#seventeen#people#was#enough#for#getting#a#
general#perception#of#the#situation#at#Axfood#IT.##

3.4'Data'Analysis'
Following#the#collection#of#data,#the#results#from#the#survey#was#compiled#and#the#
recorded#interviews#were#transcribed#shortly#after.#As#the#interview#guideline#was#
constructed#based#on#the#five#characteristics#of#KPIs#it#was#possible#to#separate#and#
cluster#the#interview#data.#This#enabled#structured#transcriptions#of#the#empirical#
results.#To#diminish#potential#risk#of#biases#and#differences#in#interpretation#of#the#data#
we#individually#conducted#short#reflections#after#each#interview#(Saunders#et#al.,#2015).#
The#documentation#of#reflections#was#made#separately#to#avoid#influencing#each#other#
and#was#discussed#after.#We#summarized#our#reflections#after#each#of#the#interviews#
were#finished#and#discussed#and#compared#our#interpretations#of#our#observations.#If#
there#were#any#questions#or#disregards#concerning#how#to#interpret#some#specific#data#
the#respondent#was#contacted#by#ePmail#to#validate#the#interpretation.#The#compiled#
qualitative#data#from#the#survey#and#the#transcription#of#the#interviews#served#as#a#base#
for#our#analysis.#However,#discrepancies#between#the#answers#from#the#survey#and#the#
interviews#were#found#for#some#of#the#repeated#questions.#From#the#survey,#we#
identified#certain#trends#that#did#not#completely#correlate#with#the#answers#from#the#
interview.#The#reason#for#this#may#be#that#in#the#interviews#the#respondent#had#a#chance#
to#develop#the#reasoning#behind#their#answers.#This#has#been#taking#in#consideration#
when#making#the#analysis.##
#
From#transcriptions#and#the#compiled#quantitative#data#together#with#the#literature#
review#we#conducted#the#analysis.#Patterns#and#differences#were#easily#identified#as#the#
structure#of#our#findings#followed#the#same#structure#of#our#literature#review.#By#
! 24#
!
analyzing#the#data#through#existing#research#with#the#research#question#in#mind,#we#
could#see#how#Axfood#IT’s#KPIs#meet#the#suggested#criteria#for#effective#KPIs#(Collis#&#
Hussey,#2009).###
! !

! 25#
!
 4. Analysis'–'Making'sense'of'the'use'of'KPIs'
In!this!chapter,!the!data!collected!from!the!survey!and!interviews!is!presented!and!
analyzed!based!on!the!identified!criteria’s!for!effective!KPIs.!!

4.1'Sparse'
Axfood#IT#reports#on#seven#KPIs#that#are#categorized#under#four#areas:#IT#support;#
Human#Resources#(HR);#Finance#&#Efficiency#(see#table#2).#

The!IT!Support!KPIs#are#measuring#Customer#Satisfaction#Index#(CSI).#The#data#for#the#
CSI#KPIs#is#collected#after#every#customer#interaction#with#support#functions#under#the#
delivery#unit.#The#customer#rates#the#customer#service#representative#on#a#scale#of#1P4#
regarding#level#of#solution#and#service#provided.#Further,#a#third#IT#Support#KPI,#service#
level,#measures#how#long#the#customer#waits#before#he#or#she#receives#help#from#the#IT#
support.#The#goal#is#that#the#customer#who#requests#help#should#receive#support#within#
60#seconds.#Further,#the#HR#KPI#measures#level#of#absence#in#percentage#of#fullPtime#
equivalent#(FTE),#where#FTE#is#the#total#number#of#paid#hours#during#a#time#period.#
##
The#first#out#of#the#two#financial#KPIs#is#external#revenue.#The#external#revenue#KPI#
measures#the#percentage#of#revenue#that#is#generated#from#Axfood#Group’s#franchise#
business#in#comparison#to#the#revenue#generated#from#within#the#organization.#The#
second#financial#KPI#only#applies#to#Axfood#IT#and#is#an#internal#savings#target#
expressed#in#real#numbers.#The#KPI#is#assessed#on#the#basis#of#outcome#and#functions#as#
an#indirect#reinforcement#of#the#efficiency#KPI.##Lastly,#the#efficiency#KPI#measures#the#
percentage#of#consultants#in#comparison#to#the#total#cost#of#employees.#Additionally,#
Axfood#IT#uses#an#eight#KPI#that#measures#Axfood#IT’s#cost#compared#to#Axfood#group's#
revenue.#However,#this#KPI#is#not#included#in#the#monthly#newsletter.##

! 26#
!
#
As#discussed#in#previous#research,#a#limited#number#of#KPIs#is#to#prefer#as#it#provides#a#
better#base#for#getting#KPIs#that#are#strategically#aligned,#but#also#to#create#attention#
towards#the#desired#aspects#(Chan,#2004;#Davenport,#2001;#Eckerson,#2009).#During#the#
interviews#there#were#no#general#concerns#regarding#the#number#of#KPIs,#however,#two#
of#the#respondents#(11;#6)#shared#their#experience#from#working#with#up#to#thirty#KPIs#
at#a#previous#workplace.#One#of#these#respondents#pointed#out#that#one#of#the#major#
issues#with#reporting#on#a#large#amount#of#metrics#was#that#it#created#a#narrow#focus#
where#all#efforts#was#directed#on#activities#connected#to#the#KPIs#(respondent#6).#This#
dilemma#is#highlighted#by#Davenport#(2001)#as#he#discusses#the#problem#of#putting#
attention#towards#the#most#important#aspects.#The#respondent#describes#how#the#
extensive#amount#of#KPIs#further#leads#a#situation#where#the#organization#forgot#about#
the#reality.#It#was#major#focus#on#individual#performance#on#the#expense#of#cooperation.#
This#would,#according#to#Chewing#and#Harrell’s#(1990)#argument,#have#a#negative#
implication#on#the#decision#making,#which#is#something#that#the#respondent#elaborates#
on#during#the#interview.#He#or#she#shared#that#the#number#of#KPIs#used#at#Axfood#IT#is#
not#of#any#concern.#When#comparing#the#two#different#cases,#the#respondent#describes#it#
as#easier#to#put#attention#on#creating#the#right#behavior#at#Axfood#IT.#He#or#she#argues#
that#if#using#the#right#KPIs#an#amount#of#5#to#6#KPIs#is#more#than#enough#to#create#the#
behaviors#and#effect#that#the#organization#wish#for.#Consequently,#Axfood#IT#does#have#
right#prerequisites#for#creating#an#environment#where#attention#can#be#directed#towards#
the#most#important#activities#within#the#business#(Chewing#&#Harrell,#1990;#Davenport,#
2001).##
#
The#issue#concerning#information#overload#due#to#an#extensive#number#of#KPIs#does#not#
seem#to#be#a#problem#at#Axfood#IT.#From#a#different#point#of#view,#the#KPIs#are#few#but#
are#perceived#as#broad#and#general.#Even#though#they#are#few#to#a#number,#the#KPIs#are#
built#on#an#extensive#amount#of#information.#One#example#is#brought#up#in#the#
interviews,#where#one#respondent#(1)#discuss#the#savings#target#which#is#a#reflection#of#
Axfood#IT’s#costs.#It#is#assessed#by#comparing#Axfood#IT’s#total#costs#to#the#budgeted#
cost.#This#implies#that#the#target#includes#fixed#costs,#such#as#salaries,#and#other#
operational#costs#that#the#employees#cannot#influence.#In#order#to#balance#this#issue,#
Axfood#IT#uses#one#efficiency#KPI#which#measures#the#cost#of#consultants#in#comparison#

! 27#
!
to#the#total#cost#of#employees.#This#type#of#cost#control#forces#the#employees#to#take#
active#decisions#when#consultants#should#be#brought#into#a#project.###
#
According#to#internal#material#the#KPIs#at#Axfood#IT#are#reviewed#yearly#and#when#it#is#
needed.#However,#during#the#interviews#none#of#the#respondents#mention#the#last#time#
the#KPIs#was#refined.#In#relation#to#question#4#(see#table#1)#one#of#the#respondents#
exemplify#this#by#claiming#that#he#or#she#was#part#of#developing#the#CSI#KPIs#and#they#
have#not#been#altered#for#a#long#time.#
#
“The!current!KPIs!have!been!used!for!a!long!time!and!the!outcome!have!been!relatively!
stable!…!the!same!KPIs!does!not!have!to!be!used!forever,!they!need!to!change!to!be!relevant!
and!that!is!not!what!the!situation!looks!like!today!at!Axfood!IT”.!(13)!
!
This#finding#goes#against#Parmenter#(2015),#who#highlights#the#importance#of#
continuously#refine#KPIs#in#order#for#them#to#have#an#impact#on#the#performance#of#the#
organization.#Further,#Eckerson#(2009)#highlights#the#importance#of#having#a#flexible#
approach#when#developing#and#refining#the#KPIs#in#order#for#them#to#reflect#the#
organization's#strategy.##
#

4.2'Simple'
“I!understand!the!KPIs!and!believe!that!they!measure!what!they!should,!however!it!can!be!
questioned!whether!they!really!are!the!KPIs!that!we!should!have!in!place”.#(8)#
#
“I!do!not!understand!underlying!reasoning!behind!the!measurements!and!why!we!use!
them.!Historically,!these!KPIs!have!not!been!driving!the!desired!results!but!they!are!still!the!
same”.(3)#
#
In#order#for#a#KPI#to#be#effective,#it#is#dependent#on#that#it#is#simple#to#understand.#If#not,#
the#KPI#is#difficult#to#influence#and#first#and#foremost#to#influence#it#in#the#right#way.#
(Merchant,#2006;#Wouters#&#Wilderom,#2008;#Eckerson,#2009;#Kerzner,#2013).#
Discrepancies#in#the#answers#regarding#the#simple#characteristics#could#be#observed#and#
the#respondent's#answers#from#the#survey#and#the#interviews#did#not#conform.#The#
survey#showed#that#the#respondents#found#that#five#of#the#seven#KPIs#were#perceived#as#
! 28#
!
easier#to#understand#(CSIPSolution,#CSIPService,#Service#Level,#Absence#and#Proportion#
of#consultants)#and#the#savings#target#KPI#was#perceived#to#be#the#least#simple.#During#
the#interviews,#eight#respondents#answered#that#they#have#a#general#understand#for#
what#the#KPIs#mean#and#how#they#are#calculated#and#three#respondents#answered#that#
they#do#not#know#what#they#mean#and#how#they#are#calculated.#The#remaining#
respondents#answered#that#they#knew#the#numbers#behind#a#few#of#the#KPIs#but#not#all#
of#the#measures.##
#
“We!do!not!use!them![the!KPIs]!daily,!we!take!a!look!at!them!in!slight!panic!within!the!
management!team.!It!can!also!be!difficult!to!find!the!data!to!produce!some!of!the!KPIs.!I!am!
not!sure!how!the!KPIs!are!communicated,!maybe!at!the!intranet.”(12)#
#
It#is#not#unusual#that#KPIs#are#perceived#to#be#complex#(Reginald,#2013).#Even#though#
the#users#of#the#KPIs#express#a#general#understanding#for#the#metrics,#they#question#why#
those#metrics#have#been#chosen#as#the#suitable#KPIs#for#Axfood#IT.#The#respondents#
express#uncertainty#regarding#what#the#KPIs#are#actually#measuring#and#the#majority#of#
the#respondents#argue#the#KPIs#are#relatively#general#and#difficult#to#grasp.#Not#
understanding#why#the#KPIs#are#used#can#increase#the#risk#that#the#metrics#are#first#and#
foremost#perceived#as#control#mechanisms#and#not#as#tools#for#motivation#(Eckerson,#
2009).#The#KPIs#at#Axfood#IT#are#followed#up#in#a#monthly#newsletter#that#is#sent#out#to#
all#employees,#where#the#results#of#the#KPIs#are#presented#in#a#table.#One#of#the#
respondents#(4)#claims#that#it#is#sometimes#difficult#to#understand#the#value#of#what#the#
KPI#really#reflects#and#to#understand#the#context#of#the#situation.#This#indicates#that#
Axfood#IT#do#not#communicate#the#KPIs#in#a#way#that#is#easy#to#interpret#(Eckerson,#
2009).#In#order#to#present#KPIs#in#an#understandable#and#accessible#format,#Eckerson#
(2009)#suggest#the#use#of#dashboards#can#enhance#the#ability#to#understand#the#KPIs#
through#status#and#trends.#This#can#further#support#the#users#to#integrate#the#use#of#the#
KPIs#as#a#tool#in#their#daily#work#and#enhance#the#usage#frequency#whereas,#for#now,#
only#one#of#the#respondents#uses#the#KPIs#daily.##

4.3'Actionable'and'Owned'
The#results#from#the#survey#shows#a#trend#that#the#KPIs#that#are#perceived#to#be#simple#
are#the#same#KPIs#that#users#find#easy#to#take#action#on#(absence,#service#level#and#
proportion#of#consultants,#see#Appendix).#The#answers#from#the#interviews#however#
! 29#
!
indicate#that#there#is#a#consensus#where#the#users#of#the#KPIs#find#it#difficult#to#take#
immediate#action#if#the#metrics#shows#a#negative#trend.#A#vast#majority#of#the#
respondents#explain#that#they#need#to#investigate#the#underlying#circumstances#in#order#
to#understand#why#the#KPI#shows#a#certain#result.#This#can#be#put#in#relation#to#the#
simple#criteria,#where#the#results#indicate#that#the#KPIs#are#understood#to#a#certain#
degree#but#that#there#are#issues#concerning#an#understanding#for#how#they#are#
calculated.#Thus,#if#the#respondents#fully#understood#the#underlying#variables#behind#the#
KPIs#they#should#not#have#to#investigate#underlying#reasons#for#why#the#KPIs#show#a#
certain#trend.#However,#the#lack#of#ability#to#take#action#can#further#be#explained#by#a#
phenomenon#discussed#in#previous#research.#It#is#not#uncommon#that#organizations#
unintentionally#develop#KPIs#that#the#users#are#unable#to#influence#(Eckerson,#2009).#
This#is#discussed#during#the#interviews#where#one#of#the#respondents#(15)#argues#that#
the#majority#of#the#KPIs#are#not#developed#in#a#way#that#enables#him#or#her#to#influence#
it.#Another#respondent#(17)#elaborates#on#the#issue#and#perceives#the#KPIs#to#be#a#
reflection#of#a#request#to#operate#more#effectively#but#that#the#KPIs#in#themselves#are#not#
tools#that#can#help#him#or#her#to#take#action.#One#of#the#respondents#(5)#discusses#how#
he#or#she#finds#it#more#important#to#understand#why#the#KPIs#are#not#reached#instead#of#
focusing#on#how#the#KPIs#should#be#reached.#The#respondent#further#argues#that#this#can#
be#an#indication#of#that#the#wrong#KPIs#are#in#use.#Further,#if#the#KPI#is#uncontrollable#by#
the#users#whose#performance#it#is#supposed#to#measure,#Merchant#(2006)#argues#that#it#
is#not#a#truthful#reflection#of#how#the#users#perform.#Several#of#the#respondents#requests#
KPIs#that#are#a#better#reflection#of#how#they#operate,#such#as#number#of#process#failures#
and#connect#it#to#how#the#performance#of#Axfood#IT#services#contributes#to#the#
performance#of#Axfood#Group.##
!
“The!KPIs!do!not!really!motivate!me!in!the!way!I!work,!they!rather!feel!as!a!control!device!
but!without!any!clear!purpose.!I!think!other!KPIs!than!the!ones!we!currently!use!could!
motivate!me!more.!It!could,!for!example,!be!interesting!to!measure!what!we!actually!
deliver!and!what!we!contribute!with,!we!do!not!measure!that!right!now”.!(15)!
!
During#several#of#the#interviews,#it#occurs#that#the#KPIs#are#not#taken#seriously.#Overall,#
a#majority#of#the#respondents#specifically#express#that#the#current#KPIs#are#not#

! 30#
!
developed#in#an#efficient#way#and#that#the#KPIs#are#perceived#more#as#a#controlling#
device#than#a#tool#to#help#and#motivate#them#in#their#daily#work.##
#
“I!do!not!think!that!I!am!(the!owner)!but!I!could!be!without!even!knowing!it.!I!do!not!even!
know!the!KPIs.!I!do!not!take!them!seriously,!it!sounds!terrible!but!that!is!the!reality.!
Everyone!has!good!intentions!and!visions!when!they!develop!and!implement!the!KPIs!but!in!
reality!it!is!not!a!simple!task.!Getting!the!KPIs!to!steer!the!right!behavior!and!performance!
is!not!easy!and!my!impression!is!that!they!often!do!not!produce!what!they!intend!to”.!(11)!
!
Ownership#can#be#established#through#accountability#(Eckerson,#2010;#Kerzner,#2013;#
Parmenter,#2015).#However,#users#of#KPIs#should#only#be#held#accountable#if#he#or#she#is#
able#to#influence#it.#The#responses#from#the#interviews#indicated#that#Axfood#IT#does#not#
have#an#outspoken#strategy#concerning#individual#ownership#of#specific#KPIs.#However,#
the#KPIs#that#the#respondents#expressed#that#they#feel#responsible#for#was#the#efficiency#
KPI#and#the#HR#KPI.#This#can#be#explained#by#captured#trends#from#the#survey#which#
indicates#that#the#efficiency#and#the#HR#KPIs#are#the#metrics#that#the#users#perceive#to#be#
simple#but#also#know#how#to#act#on.#It#can#further#be#observed#that#these#two#measures#
showed#a#positive#trend#concerning#motivation.#Thus,#these#two#metrics#are#in#line#with#
the#reasoning#that#KPIs#that#are#simple#to#understand#enables#the#users#to#influence#it.#
The#ability#to#influence#a#KPI#further#indicates#that#it#is#a#reflection#of#the#user's#
performance,#which#leads#to#that#it#can#be#enabling#of#their#work#and#thus#serve#as#a#tool#
to#increase#performance#(Eckerson,#2010;#Kerzner,#2013;#Parmenter,#2015;#Wouters#&#
Wilderom).##

4.4'Involvement'
“I!have!been!involved!in!the!process!of!developing!KPI!X!since!I!am!a!part!of!the!
management!team.!It!has!been!used!for!a!long!time.!Just!because!something’s!are!decided!
in!a!protocol!somewhere!does!not!mean!that!it!is!relevant!for!the!business.!We!do!not!talk!
about!the!KPIs!and!we!are!not!aware!of!their!status,!we!do!not!discuss!them!at!meetings.!
(6)!
!
The#KPIs#at#Axfood#IT#have#been#developed#in#collaboration#with#upper#management#
and#the#middle#managers.#This#is#in#line#with#the#recommendations#from#previous#
research#that#stress#the#importance#of#taking#a#collaborative#approach#when#developing#
! 31#
!
KPIs.#This#is#because#it#increases#the#chances#of#capturing#locally#developed#expertise#
(Wouters#&#Wilderom,#2008;#Eckerson,#2009;#Kertzner,#2013).#Involving#a#number#of#
persons#in#the#KPI#development#process#further#increases#the#chances#of#successfully#
implementing#the#metrics.#This#implies#that#the#KPIs#will#be#more#relevant#and#enabling#
of#the#users#work#since#they#capture#important#aspects#of#their#routines#(Kaplan#&#
Norton,#2001;#Wouters#&#Wilderom,#2008).##
#
“No!serious!follow!up!of!the!KPIs!and!their!content!is!done,!only!if!any!of!the!KPIs!are!not!in!
phase.!We!lack!routines!for!follow!up!which!probably!goes!hand!in!hand!with!that!the!KPIs!
are!not!used!as!they!should!or!were!intended!to”.(1)#
#
Even#though#the#middle#managers#have#been#involved#in#the#development#process#the#
general#attitude#towards#the#metric#is#that#they#are#perceived#as#irrelevant#for#their#
work.#This#is#reflected#in#the#low#rate#of#usage#of#the#KPIs#(see#appendix,#question#7).#
The#information#from#the#interviews#indicates#that#the#KPIs#only#receive#proper#
attention#when#they#show#a#negative#trend.#In#contrast,#the#emphasis#of#focusing#
attention#towards#the#importance#of#using#KPIs#is#highlighted#in#previous#research#
(Zack,#1999).#A#The#involvement#aspect#is#in#Axfood#IT’s#case#not#dependent#on#if#the#
middle#managers#are#included#in#the#development#process.#Senior#management#
involvement#is#important#when#developing#successful#KPIs.#Active#participation#that#
highlights#how#the#KPIs#can#be#used#in#order#to#help#the#managers#and#thus#the#
organization#to#perform#better#can#lead#to#that#the#users#perceive#the#KPIs#to#be#an#
important#aspect#of#their#work.#Since#KPIs#do#not#create#any#value#on#their#own,#the#
focus#on#directing#attention#towards#the#usage#of#KPIs#perceived#to#be#important#for#
Axfood#IT.###
'
4.5'Correlated'
'
!“The!KPIs!somewhat!help!to!reach!Axfood!ITs!goals!but!they!are!too!weak,!both!the!KPIs,!
the!goals!and!the!vision.!I!do!not!even!know!what!the!strategy!is,!I!do!not!think!anyone!
does.”(7)!

In#order#to#develop#a#wellPfunctioning#PMS,#a#strong#consensus#from#previous#research#
is#that#KPIs#need#to#be#strategically#aligned#(Lynch#&#Cross,#1995;#Wisner#&#Fawcett,#

! 32#
!
1991;#Goold,#1991;#Kaplan#&#Norton,#1992;#Bourne#et#al.,#2000).#Axfood#IT#has#a#clear#
vision#to#be#“the#best#IT#unit#in#the#industry”#but#the#respondents#express#a#lack#of#
strategic#alignment#in#the#interview#even#though#the#results#of#the#survey#indicate#the#
opposite#for#some#of#the#KPIs.#!
!
A#PMS#is#in#place#to#aid#the#implementation#of#an#organization's#strategy#as#it#translates#
the#strategy#into#a#set#of#performance#measures#that#can#guide#the#employee’s#efforts#to#
reach#the#desired#results#(Wouters#&#Wilderom,#2008).#Thus,#KPIs#need#to#be#correlated#
to#strategic#objectives#of#the#organization#(Eckerson,#2009).#Concerns#regarding#the#lack#
of#a#strategy#are#expressed#during#the#interviews#and#questions#whether#any#strategy#
even#exists#it#brought#up#by#one#of#the#respondents.#Thus,#the#lack#of#strategy#can#
explain#why#some#of#the#respondents#express#uncertainty#of#how#their#work#is#related#to#
the#KPIs.#The#respondent’s#perceived#absence#of#a#strategy#also#makes#it#difficult#for#
Axfood#IT#to#think#in#terms#of#CSF,#which#is#important#to#define#in#the#development#of#
KPIs#(Parmenter,#2015;#Rockart,#1979).#Axfood#IT#could#benefit#from#defining#its#CSF#as#
they#can#be#helpful#in#order#to#align#KPIs#with#the#organization's#strategic#goals#as#a#CSF#
is#the#limited#number#of#areas#in#which#satisfactory#results#must#be#produced#in#order#to#
secure#the#success#of#the#organization#(Rockart,#1979).#In#regards#to#that#Axfood#IT’s#
vision#is#an#expression#of#a#willingness#to#develop#into#the#best#it#unit#in#the#industry,#the#
respondents#argue#for#measures#that#reflect#the#actual#delivery#of#services#instead#of#a#
cost#control#focus.#Identifying#KPIs#that#can#reflect#actions#of#innovation#and#success#
rates#of#provided#services#may#be#more#helpful#for#Axfood#IT#to#reach#its#vision#than#a#
strict#focus#on#costs#control.#
#
An#organization's#strategy#is#derived#from#its#vision#and#a#positive#finding#is#that#Axfood#
IT’s#vision#is#widely#accepted#and#well#documented#within#the#organization.#
Communicating#and#sharing#a#common#vision#can#otherwise#be#a#complex#task#
according#to#Norton#and#Kaplan#(2006).#However,#only#relying#on#an#organization's#
vision#can#be#difficult#since#it#is#broad#statement#concerning#where#the#organization#
wants#to#be#in#the#future#(Parmenter,#2015).#
#
“The!KPIs!show!how!Axfood!IT!is!managed!from!a!cost!perspective!but!they!do!not!indicate!
what!benefits!we!produce!for!the!whole!Axfood!Group!business!more!than!how!we!operate!

! 33#
!
our!support!function.!We!need!KPIs!that!describes!the!benefits!of!our!business!and!KPIs!
that!can!guide!us!in!our!daily!work.”!(4)!
!
Axfood#IT#uses#a#mix#of#outcome#and#driver#KPIs.#This#is#in#line#with#Kaplan#and#Norton#
(1996)#who#puts#emphasis#on#the#importance#of#having#both#outcomes#and#drivers#as#
the#complement#eachother.#Axfood#IT#has#three#financial#KPIs#out#of#which#two#are#
communicated#in#the#monthly#newsletter.#The#remaining#KPIs#have#a#driving#character#
as#they#are#a#reflection#of#the#financial#drivers#of#the#organization's#profitability.#As#
stated#in#previous#research,#it#is#evident#that#service#organizations#face#different#kinds#of#
challenges#when#developing#KPIs#compared#to#manufacturing#organizations#(Anthony#et#
al,#2014;#Modell,#1996).#The#dilemma#of#balancing#costs#and#revenue#within#a#service#
organization#is#due#to#that#the#interrelationship#between#productivity#and#quality#need#
to#be#consciously#considered#P#the#cut#of#costs#in#the#input#of#resources#may#have#a#
negative#effect#on#the#perceived#quality#(Grönroos#&#Ojasalo,#2004).#The#fact#that#it#is#
complicated#to#measure#the#delivery#of#intangible#goods#could#be#one#of#the#reasons#for#
why#they#miss#appropriate#measures#that#describe#the#quality#of#the#services#they#
provide.#Axfood#IT’s#main#responsibilities#are#the#development#and#operation#of#all#IT#
systems,#to#deliver#an#effective#and#robust#IT#support#and#contribute#to#the#development#
of#processes#through#proactive#action#and#innovation#for#the#Axfood#Group.#However,#
these#responsibilities#are#only#partly#reflected#in#the#KPIs.#The#respondent’s#puts#
emphasis#on#the#lack#of#KPIs#that#measures#what#they#do#in#their#daily#work.#The#KPIs#
are#onePdimensional#is#expressed#from#many#of#the#respondents.#An#expression#is#that#
the#current#KPIs#are#not#able#to#capture#the#aspects#of#establishing#a#stability#of#the#
systems.#When#the#respondents#are#asked#if#they#consider#the#current#KPIs#to#help#them#
reach#their#individual#and#Axfood#ITs#goals#(see#table#1,#question#1),#a#majority#of#the#
respondents#answer#that#they#believe#that#the#KPIs#are#missing#a#number#of#aspects#that#
need#to#be#considered#for#them#to#be#aligned#with#the#goals#of#the#organization.#A#
majority#of#the#respondents#describes#how#there#is#a#strong#focus#on#the#financial#KPIs#
but#few#measurements#that#focuses#on#the#actual#operations#within#Axfood#IT.##
#
“We!are!often!questioned!why!our!projects!cost!so!much!money.!Our!way!of!work!is!
reactive,!we!respond!to!orders!and!requirements!instead!of!working!proactive!and!decide!
that!‘we!should!be!here!in!3!years!and!in!order!to!get!there!we!need!to!take!these!steps’.!We!

! 34#
!
need!more!KPIs!that!are!related!to!results!we!are!producing!to!further!justify!our!existence!
by!accounting!for!what!we!actually!produce”.!(8)#
#
An#increased#used#of#customerPoriented#KPIs#could#help#Axfood#IT#to#justify#their#
existence#towards#Axfood#AB.#Using#that#type#of#KPIs#is#crucial#in#service#organizations#
since#a#service#often#is#a#simultaneous#process#between#service#provider#and#customers.#
Taking#external#efficiency#should#not#be#an#issue#for#Axfood#IT#as#they#are#an#internal#
service#organization&where&Axfood&Group&is&the&“only”&customer.&Involving&customers&in&
the$process$of$defining$KPIs$that$captures$the$value$of$their$services$could$help$to$
develop'effective'KPIs'(Jääskeläinen'et'al.,'2014).'#
! !

! 35#
!
 5. Concluding'discussion'
An#increased#interest#for#PMS#and#KPIs#has#resulted#in#that#organizations#are#interested#
how#they#should#be#used#as#efficiently#as#possible#to#increase#performance.#This#study#
set#out#to#investigate#how#KPIs#within#a#service#organization#meet#the#suggested#criteria#
for#effective#KPIs.#Effective#KPIs#are#characterized#by#five#criteria:#Sparse,#Simple,#
Actionable/Owned,#Correlation#and#Involvement.#Further,#the#KPI#need#to#be#aligned#
with#the#organization's#vision#and#strategy#as#the#very#purpose#of#a#PMS#is#to#implement#
strategy.#Previous#research#has#indicated#that#measuring#performance#in#any#type#of#
organization#is#challenging,#but#can#be#especially#complicated#in#service#organizations#as#
no#tangible#goods#are#produced.#This#is#further#complicated#since#management#control#
has#traditionally#been#influenced#by#the#need#to#quantify#goods#from#the#perspective#of#a#
manufacturing#organization.##

Based#on#the#collected#data#we#found#that#the#sparse#characteristic#is#partly#fulfilled#in#
the#sense#that#Axfood#IT#only#uses#a#limited#number#of#KPIs.#However,#even#though#they#
are#few#to#a#number,#the#users#perceived#them#as#broad#and#onePdimensional.#No#
continuous#follow#up#is#conducted#unless#when#the#KPIs#shows#a#negative#trend.#The#
limited#number#of#KPIs#however#enables#Axfood#IT#to#adjust#the#metrics#to#a#changing#
business#environment.#However,#the#same#KPIs#have#been#used#for#a#long#time.#That#no#
change#in#Axfood#IT#business#environment#has#happened#during#can#be#regarded#as#
unlikely.#

#In#regards#to#simple,#there#is#a#general#understanding#for#the#KPIs.#However,#the#
employees#question#why#these#specific#KPIs#are#relevant#for#Axfood#IT.#Increased#efforts#
could#be#made#in#order#to#create#an#understanding#for#why#the#KPIs#are#useful#for#the#
success#of#the#organization.#Further,#it#is#difficult#for#the#users#to#take#immediate#action#
on#the#KPIs#since#they#have#a#need#to#investigate#the#underlying#circumstances.#This#is#
further#due#to#that#the#users#do#not#find#the#KPIs#to#be#metrics#that#they#can#influence.#
Nothing#indicates#the#users#have#been#assigned#an#outspoken#ownership#for#the#KPIs,#
however#they#they#feel#responsible#for#the#outcome.#Thus,#actionable/owned#criteria#is#
not#fulfilled.#In#concern#to#involvement,#the#users#have,#to#a#high#extent,#been#involved#in#
the#developing#the#KPIs#but#there#is#a#low#frequency#of#usage.#The#metrics#are#not#
perceived#to#add#any#value#which#can#explain#the#lack#of#attention#towards#the#KPIs.#
During#the#correlated#related#questions,#it#emerged#that#the#users#of#the#KPIs#had#

! 36#
!
difficulties#to#define#an#answer.#This#arises#from#the#notion#that#uncertainties#regarding#
Axfood#ITs#strategy#is#evident.##

#Weaknesses#in#fulfillment#in#all#five#criteria#have#been#identified#from#the#empirical#and#
quantitative#data.#However,#the#most#prominent#abbreviations#could#be#found#in#the#
actionable/ownership#and#correlation#criteria.#These#are#the#two#characteristics#that#
shows#the#lowest#degree#of#fulfillment.#From#the#conclusions#of#the#literature#review,#we#
expected#that#the#characteristics#that#would#be#most#challenging#for#a#service#
organization#would#be#simple#and#actionable/owned#due#to#the#complexity#of#quantifying#
intangible#services#which#leads#to#that#they#would#be#difficult#to#influence.##

#A#majority#of#the#respondents#specified#that#they#perceive#the#CSI#and#HR#KPIs#to#be#
simple#to#understand,#which#indicates#that#users#know#how#to#influence#these#KPIs#
(Eckerson,#2009).#In#contrast,#the#employees#cannot#be#expected#to#know#how#to#
influence#the#KPIs#that#they#perceive#to#be#difficult#to#understand,#such#as#the#financial#
and#efficiency#KPIs.#However,#even#though#two#of#the#measures#are#perceived#to#be#
simple,#a#“don’t#care”#attitude#is#evident#among#the#respondents#concerning#all#of#the#
KPIs.#For#example,#one#of#the#respondents#specifically#expresses#that#he#or#she#does#not#
take#the#measures#seriously.#This#attitude#could#be#explained#by#several#reasons.#First,#
the#evaluation#of#the#KPIs#is#done#in#a#monthly#basis#in#a#newsletter.#Even#though#it#
exists#followPup#routines,#they#are#perceived#to#be#inadequate.#It#is#further#expressed#
that#the#KPIs#only#are#properly#evaluated#if#they#are#not#in#phase.#Therefore,#new#
routines#for#the#followPup#of#the#KPIs#should#be#established#in#line#with#Parameter’s#
(2015)#recommendations.#From#the#perspective#of#Kerzner#(2013),#an#increased#focus#
on#the#evaluation#of#the#KPIs#could#strengthen#the#acceptance#for#the#KPIs#among#the#
employees#as#it#increases#their#understanding#for#why#and#how#the#KPI#can#be#used#to#
benefit#the#performance#of#the#organization.#Educational#efforts#could#further#help#to#
establish#involvement#and#lead#to#that#the#employees#will#accept#and#understand#the#
purpose#of#why#KPIs#are#used.###

Another#factor#that#can#explain#the#lack#of#interest#in#the#KPIs#is#that#there#is#an#absence#
of#accountability#and#ownership.#Parameter#(2015)#puts#emphasis#on#that#one#of#the#key#
features#of#a#KPI#is#that#it#tells#the#users#what#actions#to#take#in#order#to#reach#the#
desired#goal.#To#make#that#possible,#the#KPI#needs#an#owner.#However,#only#few#of#the#
respondents#experience#that#they#feel#ownership#for#a#specific#KPI.#The#respondents#
! 37#
!
express#uncertainty#regarding#what#the#KPIs#are#actually#measuring#and#the#majority#of#
the#respondents#argue#the#KPIs#are#relatively#general#and#difficult#to#grasp.#Further,#
some#of#the#respondents#do#not#even#know#if#they#should#be#or#are#responsible#for#any#
of#the#KPIs.#If#the#employees#do#not#feel#accountable#for#the#KPIs,#they#will#not#care#to#
actively#use#them.#The#negative#attitudes#towards#the#KPIs#could#also#be#explained#by#
the#fact#that#many#of#the#employee’s#only#experience#that#the#KPIs#serve#as#control#
mechanisms#by#upper#management#and#not#as#a#motivational#tool.#This#combined#with#
the#notion#that#the#respondents#perceive#the#KPIs#to#have#no#clear#purpose#could#further#
explain#the#weak#experiences#of#accountability.##

#Axfood#IT#did#not#fulfill#the#criteria#of#correlation,#which#was#not#in#line#with#what#we#
expected.#As#the#interviews#proceeded,#it#became#evident#that#there#is#an#absence#of#an#
established#and#communicated#strategy,#which#may#be#the#underlying#reason#for#fully#
meeting#this#characteristic.#The#absence#and/or#lack#of#understanding#of#an#established#
strategy#may#be#the#underlying#reason#for#why#the#criterion#of#effective#KPIs#are#difficult#
to#meet.#This#is#due#to#that#effective#KPIs#should#be#derived#from#an#organization's#
vision,#mission#and#critical#success#factors#(Kertzner,#2013;#Parameter,#2015).#Axfood#IT#
could#benefit#from#defining#its#CSF#as#they#can#be#helpful#in#order#to#align#KPIs#with#the#
organization's#strategic#goals.#As#Axfood#IT’s#vision#is#an#expression#of#a#willingness#to#
develop#into#the#best#it#unit#in#the#industry,#it#could#be#argued#that#the#KPIs#should#have#
a#stronger#focus#on#innovation#and#the#benefit#that#the#delivered#service#is#contributing#
towards#the#vision.#One#of#the#respondents#argued#for#measures#that#reflect#the#actual#
delivery#of#services#instead#of#a#cost#control#focus.#Identifying#KPIs#that#can#reflect#
actions#of#innovation#and#success#rates#of#provided#services#may#be#more#helpful#for#
Axfood#IT#to#reach#its#vision#than#a#strict#focus#on#costs#control.#

! !

! 38#
!
 6. Suggestions'for'future'research''
As#the#two#main#reasons#for#why#performance#measurement#initiatives#fails#is#due#to#
poor#design#of#KPIs#and#implementation#difficulties.#Building#on#this#study,#we#request#
further#research#about#the#criteria#for#developing#effective#performance#measures#in#
general#and#for#KPIs#in#particular.#As#criterion#for#performance#measures#are#further#
developed,#this#could#enable#development#of#more#standardized#measures#for#service#
organizations.#
##
As#this#study#did#not#investigate#issues#relating#to#the#implementation#of#KPIs,#it#could#
be#of#interest#to#identify#how#KPIs#are#practically#implemented#into#a#service#
organization.#Further,#investigating#if#the#implemented#KPIs#actually#improved#the#
performance#of#the#organization#could#be#an#interesting#aspect#to#put#more#empirical#
emphasis#on#since#many#performance#measurement#initiatives#fail.#
# #

! 39#
!
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Zack,#M.#H.#(1999).#Knowledge#and#strategy.#Woburn:#ButterworthPHeinemann.#

##
#

# #

! 43#
!
APPENDIX'

'

'

'

' '

! 44#
!
 '

'

'

! 45#
!
'

! 46#
!