Improving The Performance Management Systems of The Company "Bibbr" To Support Its Development

Master Thesis
Improving the performance management systems of the

company "BiBBR" to support its development
Student’s name:
Student’s number:
The name of the pProgram name:
The code of the pProgram code:
The name of the sSupervisor’s name:
ACKNOWLEDGMENT
In the fFirst place, I am deeply grateful for to all lecturers who contributed their time and
knowledge for to the Master’s program in Finance and Accounting. I am gratefulappreciate for Henk
van der Berg, as themy lecturer and program coordinator, and the lecturer who taught me to adhere
to an independent approach and formulate a professional opinion based on facts and evidence. I am
immensely grateful for to Biljana Pešalj for teaching me program Management Control and
supervisingfor my thesis supervision. I am thankful for to her for the new knowledge inteaching me
Performance Measurement and Management Control, as it was a new subject for me, and thus, that
new knowledge will be useful in my future career. I am grateful to my research lecturer, for Koen van
der Kooy as the research lecturer. I am thankful for him for his guidance, patientce, and humor. Many
thanks for the his explanation of research principles and practical recommendations which guided
me in during thise work.
Moreover, I am using this opportunity to express my gratitude to BiBBR's founders and
employees: Ruben Paijens, Martijn Bruintjes, Wytse Visser, Kevin van der Veer, who allowed me to
use the BiBBR as a's case study, and who were ready to spend time with me and to share the data.
Furthermore, this master’s thesis would not have been possible without the contribution of
the professional experts, Pietro Micheli, Andrey Pavlov, and Stefano Biazzo who did not hesitate to
share their knowledge and opinion on the topic with me. I sincerely thank them for that.
Also, I express my appreciation to my parents, Alexander Annikov and Valentina Annikova,
my brother Yakov Annikov, as well as my significant other Silco van der Toorn and my friends Igor
Andreev, Natalia Andreeva, Victoria Mardahaeva, Galina Klimkina and, Daria Kuscheva for their
support and encouragement. The support of each of them was outstanding in my education in the
international environment as well as in fulfilling this master’s thesis.
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EXECUTIVE SUMMARY
In the first cause, this master’s thesis addresses the problem of low survival of small
companies and the potential support by using Performance Management Systems. The specific
problem was revealed in a Ssponsor cCompany ‘’BiBBR’’. According to the problem analysis, BiBBR
has essential gaps in PMS as a whole system and particularly in the project's control and planning of
future financial performance. These can influence negatively influence on customers satisfaction and
financial stability. Consequently, the objective of this master’s thesis is to make recommendations to
BiBBR onhow to improveing its performance management system.
According to the literature review, there is no one single model suitable for every small
company. Hence, it is necessary to take into account the specifics of a company and the specifics of
theoretical solutions. Thus, several models were considered, and the Circular Methodology by
Garengo & Biazzo (2012) was chosen to for application iny for BiBBR’s case.
Regarding methodology, the master’s thesis is the practice-oriented, and design-oriented
research. The master’s thesis combines two research strategies: the case study strategy (using BiBBR’
case) and the desk research strategy (for theoretical framework). For data collection was performed
the iInterviews with BiBBR founders, employee, and experts in Performance Management were
conducted for data collection.
Based on theoretical and empirical research, several recommendations were created made
to solve the problem. Firstly, the performance management system of BiBBR can be improved by the
introduction of the strategy map and the balanced scorecard. Secondly, BiBBR can introduce
budgeting as a tool for financial planning. Thirdly, the project control can be improved by using action
and personnel control. Action control suggests using internal audit in forms of a mystery shopper.
Personnel control represents the treatment of staff as a vital business asset and the use of motivation
techniques. Furthermore, BiBBR can use mentioned recommendations based on specified software.
Thus, the improved Performance Management sSystem can support projects control and
future financial performance. These, in turn, support customers satisfaction and financial stability,
that which fully corresponds to the research objective.
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LIST OF FIGURES
Figure 1. BiBBR’s Business

Figure 2. BiBBR’s organizational structure
Figure 3. BiBBR’s planning cycle
Figure 4. The research framework
Figure 5. The circular methodology by Garengo & Biazzo (2012)
Figure 6. Continuous strategic improvement process for SMEs by Hudson, Lean & Smart (2001)
Figure 7. Characteristics of the types of control by Hutzschenreuter (2009)
Figure 8. Budging Process
Figure 9. Budgeting template for BiBBR
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LIST OF TABLES
Table 1. BiBBR’s control and performance measures

Table 2. Matching the PMS models for BiBBR
Table 3. Performance Management Software
Table 4. Case Study Sampling
Table 5. The research schedule
Table 6. BiBBR’s strategy map
Table 7. The BiBBR’s BSC
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LIST OF APPENDICES
Appendix 1.The list of the main features of a PMS in SMEs

Appendix 2. The Responsibility Assignment Matrix
Appendix 3. BiBBR’s oObjectives
Appendix 4. BiBBR’s Business Process
Appendix 5.Compliarisonce of BiBBR's PMS witho the main features of a PMS in SMEs
Appendix 6. The Balanced Scorecard Perspectives
Appendix 7. The ExaSample of the Strategy Map
Appendix 8. Perspectives, goals, and indicators
Appendix 9. Research Sponsor Information
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LIST OF ABBREVIATIONS
BSC - Balanced scorecard

CIMA - Chartered Institute of Management Accountants
CSF - Critical success factor
KPI - Key performance indicator
KSF - Key success factor
PMS - Performance Measurement system or Performance Management system
SMEs - Small and medium-sized enterprises
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TABLE OF CONTENT
ACKNOWLEDGMENT_________________________________________________________________2
EXECUTIVE SUMMARY________________________________________________________________3
LIST OF FIGURES_____________________________________________________________________4
LIST OF TABLES______________________________________________________________________5
LIST OF APPENDICES_________________________________________________________________6
LIST OF ABBREVIATIONS______________________________________________________________7
1. CHAPTER 1. INTRODUCTION_______________________________________________________9
1.1. Problem Background_________________________________________________________9
1.2. Problem Analysis___________________________________________________________11
1.2.1. Sponsoring Company Introduction___________________________________________11
1.2.2. BiBBR Performance Management System Analysis______________________________12
3.1. Problem Statement_________________________________________________________14
3.2. Research Objective_________________________________________________________14
3.3. Research Framework________________________________________________________14
3.4. Research Questions_________________________________________________________15
2. CHAPTER 2. LITERATURE REVIEW__________________________________________________16
2.1. Performance Management Systems for SMEs____________________________________16
2.2. Management Control for Service SMEs__________________________________________20
2.3. Financial Planning for SMEs___________________________________________________20
2.4. Performance Management Software___________________________________________21
3. CHAPTER 3. RESEARCH METHODOLOGY_____________________________________________22
3.1. Research Strategy and Data Collection__________________________________________22
3.2. Data Analysis______________________________________________________________24
3.3. Research Boundaries________________________________________________________24
3.4. Research Planning__________________________________________________________25
3.5. Research Quality Measures___________________________________________________26
4. CHAPTER 4. FINDINGS AND ANALYSIS_______________________________________________27
4.1. Key Success Factors Analysis__________________________________________________27
4.2. Expert Opinions____________________________________________________________29
5. CHAPTER 5. CONCLUSIONS_______________________________________________________30
5.1. Project Control Improvement_________________________________________________30
5.2. Financial Planning Improvement_______________________________________________31
5.3. BiBBR’s PMS Improvement___________________________________________________31
6. CHAPTER 6. RECOMMENDATIONS_________________________________________________33
BIBLIOGRAPHY_____________________________________________________________________35
SELF-REFLECTION___________________________________________________________________40
APPENDICES_______________________________________________________________________41
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1. CHAPTER 1. INTRODUCTION
This master’s thesis focuses on using Performance Management systems, Performance

Measurement sSystems (PMSs), or Management Control1 in a sponsor company. PMS is a balanced
and dynamic system (Neely, 1999). The modern concept of PMS is that by translating strategic
objectives into performance measures, a company can track its progress or its absence. PMSM also
motivates for continuous improvement of processes by a loop and feedback, key performance
indicators (KPIs) and rewarding systems. Basinged on external and internal factors, management can
use performance information, makesing it possible to generate strategic initiatives (Merchant & Van
der Stede, 2017). PMS is widely used in large organizations (Ates, Garengo, Cocca, & Bititci, 2013).
Also, research studies indicate that PMS can play an essential role in supporting growth in small and
medium-sized enterprises (SMEs) (Garengo & Bititci, 2007). However, SMEs (small and medium-sized
enterprises) still have problems with implementation and using PMSs. Very often, PMSs in SMEs use
single measures, which do not give a full picture of business progress. That can be one of the factors
of SMEs fails (Hudson, Smart, & Bourne, 2001; Garengo, Biazzo, & Bititci, 2005; Chong, 2008; Garengo
& Bititci, 2007; Chalmeta & Palomero, 2012).
The sponsor company represents is used as an example of an SME. In this chapter, the
sponsor company is examined in terms of using PMS to find the problem, and formulate a research
objective and research questions. Also, a representation of a problem background is used
represented to show the external context of the problem. The problem background, the problem
analysis, the problem statement, the research objective, and the research questions constitute the
conceptual research design of the master’s thesis. The conceptual research design has been created
according to Research Methodology by Verschuren and Doorewaard (2010).
1.1. Problem Background
SMEs (companies with less than 50 employees and a 10 million euro turnover) provide over
67% of employment and 57% of value added in the non-financial business sector (The 2016/2017
annual report on European SMEs, 2017). Also, 99% of all enterprises in the European Union are SMEs
(European Commission, 2019). SMEs survival, effectiveness, and growth are essential due to 99% of
all enterprises in the European Union are SMEs. (SMEs are companies with the number of employees
less than 50 and turnover less than 10 million euros) (European Commission, 2019). SMEs provide
more than 67% of employment and 57% of value added in the non-financial business sector (The
2016/2017 annual report on European SMEs, 2017). As such, the survival, effectiveness, and growth
of SMEs are essential. However, according to the European Commission, less than 60% of SMEs
survive in the first five years (European Commission, 2017).
1
These terms are used interchangeably in this thesis.
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Specific features of SME create risks, which can lead to failure. These SME failures of SMEs
are related to both external and internal causes. In terms of external factors, there are is financiale
limitation, weak market, intense competitiveness, incompetent staff and, limited institutional
support limitation. In terms of internal factors, there is a lack of coordination, innovation,
qualification, knowledge, poor management control, poor financial control, strategy, and vision
limitations (Franco & Haase, 2010; Julien, 2018). Thus, this is a research area is a good opportunity
for scholars to support SMEs.
PMS is called used to support companies’ development and growth and can be applied for
SMEs. PMS is a part of the management function aimeddressed ato keeping track of business
progress. On top of that, PMS is used not only to monitor the performance, but also to initiate
strategic initiatives, and identify opportunities and trigger improvements in the contemporary
organization (Otley, 2003; Bisbe and Otley, 2004; Martinez, Pavlov and Bourne, 2011; Pešalj, Pavlov
and Micheli, 2018).
However, implementing and using PMS in SMEs is fraught with there is several issues
issuesof implementation and use PMS in SMEs. From On the one hand, the majority of PMS studies
have been developed for large companies. From On the otheranother hand, SMEs have unique
features which createing hardships to in applying one theoretical basis for SMEs and large
companies. (Hudson, Smart, & Bourne, 2001; Garengo, Biazzo, and Bititci, 2005; Gumbus and
Lussier, 2006; Giannopoulos, Holt, Khansalar, and Cleanthous 2013; Basuony, 2014; Pešalj, Pavlov
and Micheli, 2018).
The PMS models and frameworks were developed by Kaplan and Norton (1992, 1993,
1996),; Lynch and Cross (1991); Fitzgerald (1991); Fitzgerald and Moon (1996); (Ghalayini et al.,
(1997); Medori (1998); Medori and Steeple (2000),; Bititci (1994, 1995;, 1997, 1998);, Neely (1996);,
Bourne and Wilcox (1998); Bourne et al., (1998) and other authors. They developed studies in
which they tied the company's strategic goals to all levels of hierarchy. Goals are translated from
the highest levels, turning into employee performance measures of employees. For such systems, it
is assumed that there are formalized strategy and objectives, as well as procedures, resources, and
skills for implementing these systems in large companies. However, SMEs have their specifics
which differentiate them from large companies.
SMEs are characterized by a simple organization structure, informal culture, and
management style, short-term priorities, lack of financial and human resources, lack of business
management skills and knowledge in management, governance by founders, informal business
processes, focus on operational activities, and non-formalized strategies. The SMEs’s specific
characteristics have an influence on PMS implementation and use PMS (Garengo & Bititci, 2007;
Fuller-Love, 2006; Ates, Garengo, Cocca, & Bititci, 2013; Taylor & Taylor, 2014).
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PMS in SMEs should follow specific requirements to be effective (See Appendix 1). SME
PMS for SMEsshould be strategically aligned, consist of internal, and external, financial, and non-
financial measures, be integrated with an information system, and be easy to used easily(Cocca &
Alberti, 2010). However, mostly SME PMSs in SMEs do not follow these requirements or only
partially follow them partially(Chong, 2008; Brem, Kreusel, & Neusser, 2008; Wiesner & Millett,
2012). The situation is also complicated by the fact that, according to the Contingency tTheory,
there is no single best way to arrange a PMS in all SMEs (Taylor & Taylor, 2014).
As a result, the PMS of a sponsor company is analyzed in terms of PMS requirements to
PMS summarised by Cocca & Alberti (2010) (See Appendix 1). The PMS of a sponsor company is
interpreted in the framework order developed by (Hudson, Lean, & Smart, 2001 ; Ferreira & Otley,
2009) in terms of how PMS helps the company fulfill its objects and deliver their mission, vision,
and strategy.
1.2. Problem Analysis
1.2.1. Sponsoring Company Introduction
BiBBR, The a company located in the Netherlands, “BiBBR” was chosen as a sponsor
company,BiBBRlocates in the Netherlands. The company’s address is Stationsplein 45, A4, 3013 AK,
Rotterdam. BiBBR was founded at the beginningin of the 2015 year by two people: Ruben Paijens
and Martijn Bruintjes, . The founders are young peopletwo 23 years olds . So they didwith not have
significant knowledge and or experience in strategic planning and PMS.
BiBBR recruits students from aged 16 to 23 years old with zero-hour contracts to work on
in-store promotion actions and merchandising projects for large marketing agencies in the
Netherlands. However, BiBBR is not an employment agency (Uitzendbureau). Therefore, students
only work onlydo at marketing, sales, and communication jobswork. IOn June 2019, BiBBR hired 162
students for a part-time jobs 162 students and performed 54 projects.
The company’s clients are mostly large marketing agencies, which have an advertising and
brand promotion contract with other companies for advertising and brand promotion such as
Heineken, Huawei, and others. BiBBR now works now with ten large marketing agencies around
the Netherlands. Also, BiBBR works for retail companies such as Albert Heijn, MediaMarkt,
Easyday, Marco, and Hema. BiBBR is paid for every hour that students work. The company business
is represented in Figure 1.
Figure 1. BiBBR’s Business
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Marketing agencies/
Companies Initiatives/ Promotions Companies’ clients
Retail companies
Projects:
-Instore promotion actions
Payment
to BiBBR = Projects
-Merchandising Part-time jobs
-Brand activation students worked
-Direct sales + BIBBR commission Payment
- Reflection/evaluation in shops with mystery visits to students
for worked hours
BiBBR Zero- hour Students
Contracts
The organizational structure of BiBBR consists of the two founders, a project manager, and
three interns (See Figure 2). The team works in the office, while hired students work oin promo
actions projects. The responsibility of the team is represented in Appendix 2. The main
stakeholders of PMS are founders. They use information from the system and make decisions.
Figure 2. BiBBR’s organizational structure
For office work
Partner Partner
the founder of BiBBR the founder of BiBBR
Ruben Paijens Martijn Bruintjes
Project Manager with a full-time contract

Interns with zero-hour contracts (two) and unpaid intern (one)
Wytse Visser
For project work

162 students with zero-hour contracts
BiBBR can be classified as a micro- company according to the criteria of the European
Commission (European Commission, 2018). However, BiBBR is an adequate choice for the master’s
thesis due to the re is nolack of clear borders in the academic papers between micro and small
companiesy in terms of PMS application.
1.2.2. BiBBR Performance Management System Analysis
The Mmission and vision of the company is formulated to fulfill only asthe a social
responsibility of providing a part-time job for Netherland's students. Mission and vision do , which
does not connect with the companiey’s’ objectives. The company objectives were expressed on
request for this researcresearch, and h. The objectives are analyzed for S.M.A.R.T. criteria (See
Appendix 3). However, only two goals meet the S.M.A.R.T. criteria. It means that they could be
controlled:
 Increasing Doubling turnover in 2 times (to 750.000 euro).
 Keeping Maintaining the 25% gross profit margin. at 25%.
 Doubling Increasing the number of contracted students in 2 times (to 350 people).
Two of the three objectives met the S.M.A.R.T. criteria, meaning that it is possible to control
them. However, there is no formalized strategy fto reach these goals. According to the expert Pietro
Micheli in an interview with thehim expert Pietro Micheli, the situation with the strategic process in
BiBBR is usual for SMEs; where strategy is not designed, it just emerges.
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However, the company uses the informal planning cycle for a short period. According to
the founders in their interviews with founders, BiBBR plans its activities ahead for only 2-3 months
at a time due to BiBBR do not have lack enofugh information, skills, and resources to prepare for an
extended period. The planning is aimeddresses ato have creating a balance between the number of
student work hours and the number of project work hours. BiBBR’s planning cycle is represented in
Figure 3. For BiBBR, growth means an increasing number of students and number of projects (from
existeding clients or new clients).
2. Figure 3. BiBBR’s planning cycle
3.
Searching for new project and clients
Lack of projects Planning the number of student work hour for projects
Planning the number of project hours to load students Lack of student
Searching for new students
New clients are searched gained on LinkedIn by personal contact with project managers of
large marketing agencies on LinkedIn. New students are searched found by networking and
attracting them with online targetedonline-targeted advertising on Facebook and Instagram. BiBBR’s
business is based on people skills and Ppersonal relationship with peopleand personal skill to
communicate with people is the base of BiBBR’s business.
BiBBR’s performance management system connects with BiBBR's processes. (That
processes represented in Appendix 4). The description of the processes and performance measures
are described in Table 1.
Table 1. BiBBR’s control and performance measures
Action Description Control Performance measures
Searching in LinkedIn and directly
Searching for clients
communicationg with project - Self-Evaluation
and projects
managers of marketing agencies.
Project negotiations Meeting with project managers,
- Self-Evaluation
and communication email communications via emails
Matching students oin BiBBR's database with student The level of projects
Result control
the current database profiles and projects staffed
Searching Finding a network of
Search Find new
current students on is Facebook in Result control Number of students
students
a network of current students
Selection of students Interviewing Result control Number of students
Contracting Filling blanks Result control Number of students
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Action Description Control Performance measures
contracted
Promo action with detailed
Students preparation description sent to students or Result control Work is done
training by clients
Result control
with some,
partially action
Reflection from students
Project execution Students do promo actions control as
and feedback from clients
(checking on the
students on
place)
Invoicing and billing Result control Work is done
Factual turnover, cost,
Financial activities Result control profit, margin, the client
margin by client
According to the analysis, BiBBR can track the following in formal and informal ways:
 Actual financial performance (turnover, cost, profit, margin, tax).
 Fact and plan of worked hours
 Quality of projects execution only in the form of factual feedback from students and
field manager from the client side.
Regarding the rewarding system, BiBBR does not have KPIs for students and other
employees. BiBBR uses opinions about the work of students and other employees. Thus, there is
no t a monetary rewarding monetary system based on KPIs. However, BiBBR uses non-monetary
rewardings, as like approaching offering responsible students more personally, offering them more
projects responsible students, and showing them loyalty and personal approach.
Information Technology is an essential tool for many business processes as well as for
Performance Management. BiBBR uses three apps: Moneybird, BiBBR app, and Planday app,. It also
uses Wordpress, eEmails, Whatsapp, Linkedin and, Facebook. Moneybird is an app for accounting,
billing, invoicing, storing and managing source documents, as well as for tax reporting and returns.
According to the information collected information in that app, BiBBR provides fact margin analysis.
Regarding The BiBBR app, it has been developed to makeing for the convenience of project booking
hours more convenient forin projects by students. Also, iIt also adds new students to will connect
with a database, which then automatically of students. Now the database can matches only trained
automatically students who were trained with projects, and it cannot match students without
training.. BiBBR’s has a plan is to automate make a system withe contracting and profilesing system
automatic. The Planday app is used for employee scheduling and calculating payroll costs. BiBBR
counts the factual hours worked whours ithn this app, and according to that provides payments to
students according to that. Additionally, emails and Whatsapp are using for communicatione with
students and clients. Linkedin is the source to find new clients by analyzing profiles and direct
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communication with marketing agencies employees. Thus, BiBBR does not use specific software for
Performance Management.
To sum up, BiBBR has the same characteristics as other SMEs such as simple organization
structure, informal culture, and management style, short-term priorities, lack of financial and
human resources, lack of business skills and knowledge in management, governance by founders,
informal business processes. Moreover, for BiBBR, as a micro company, it is challenging to separate
operational and strategic activities, as well as strategic and operational planning.
Regarding The PMS, PMS ofthat BiBBR implements does not fully follow the requirements
for PMS in SMEs (SSee Appendix 5)., iIt was found that measures mostly represent the mostly
actual results. BIBBR PMS of is BIBBR presentsed as separated indicators without applying a
systematic approach. Project execution, which is tThe core business activity,, project execution, is
controlled poorly due to mainostly use ofing result control. There is less Ffinancial control is
reduced due to there is notlack of financial planning.
3.1. Problem Statement
Based on the problem analysis, the following problem statement is formulated: BiBBR has
essential gaps in PMS as a whole system and particularly in projects control and planning of future
financial performance strategy, so these can influence negatively influence on customers
satisfaction and corporate financial stability of the company, which in turn can correspond with the
failure risk failure factors.
3.2. Research Objective
Based on the problem statement, the objective of thise master’s thesis is to make
recommendations to BiBBR how to improve its whole PMS as the whole system and particularly
inmprove project control and financial planning, to support customers satisfaction and financial
stability.
3.3. Research Framework
The research framework presents a map of how the research objective is goingtowill be
achieved (See Figure 4). The research framework is divided into four parts. The first part is a
theoretical framework represented in Chapter 2 as the literature review. It consists of available
SME methodology and models available for SMEs, which are possible tocan be used for to improve
BiBBR’s PMS improvement. Also, the literature review includes the tools and techniques which are
likely to apply help tofor improvinge BiBBR’s projects control and financial planning. Furthermore,
possible IT solutions for PMS is are summarised to create a PMS digital PMS system.The second
part is an empirical framework represented in Chapter 4 as the findings and analysis. The empirical
framework is based on interviewing the BiBBR's founders and employees to find out the BiBBR’s
needs and capabilities in terms of project control and financial planning. Moreover, the PMS
experts in PMS were involved in to collecting recommendations about the better PMS designs of
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PMS for BiBBR. The third part is the result of the analysis represented in Chapter 5 as a conclusion.
The result of the analysis consists of BiBBR’sthe improved PMS system, of PMS of BiBBRwith
ordered theoretical solutions adapted for to BiBBR’s needs. The last part, is Recommendations
represented in Chapter 6, includes recommendations for on how BiBBR how tocan learn and create
strategic initiatives by applying and use the improved PMS system of PMS to learn and create
strategic initiatives.
Figure 4. The research framework
Stage A Literature study Stage B Empirical study Stage C Result of analysis Stage D Recommendations
BiBBR case
PMS for SMEs
Results of
analysis
Management control
for service SMEs
Assessment criteria Results of
Preliminaryr Conceptual model analysis Recommendations
esearch Financial planning for
SMEs Results of
analysis
IT apps PMS for PMS expert
SMEs recommendation
3.4. Research Questions

The core research question
How to improve BiBBR’s PMS as a system included project control and financial planning to
support customers satisfaction and financial stability?
The tTheoretical research subquestions
 What are theoretical models are suitable for BiBBR to improve its PMS as a system?
 What aremanagement control techniques are suitable for BiBBR to improve its project
control?
 What are financial planning techniques are suitable for BiBBR to improve its financial
planning?
 What are PMS software are available for BiBBR in IT market?
The eEmpirical research subquestions
 What the key success factors of BiBBR's business should be supported by PMS?
 What is the experts’ opinion about on the way method of improvingement PMS in BiBBR?
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2. CHAPTER 2. LITERATURE REVIEW
This chapter attemptsddresses to answer the theoretical research subquestions. This

Itchapter is divided into four parts. The first part presents the selection of an appropriate model to
improve PMS in BiBBR, baseding on the specific characteristics of BiBBR and developed SME
models of PMS for SMEs. So the first part represents a chosen methodology to improve PMS in
BiBBR, a particular tool to use PMS in BiBBR, and a framework for continuously improvingement
PMS, which BiBBR can use for future PMS development. The second part consists of the literature
review in terms of management control types for services organizations. The third part presents
the possible solutions for SME financial planning for SMEs. The last section shows software, which
is possible tocan be used for BiBBR’s PMS.
2.1. Performance Management Systems for SMEs
Based on the models developed for large companies, PMS for SMEs have been developed
since 1990e (Bititci, Garengo, & Nudurupati, 2012; Garengo & Biazzo, 2012). Majority of these
studies focused on translating strategic objectives into performance measures to support the
company to in tracking its progress and motivatinge for continuous improvement of processes by
feedback (Chennell, et al., 2000; Hudson, Lean, & Smart, 2001; Laitinen, 2002; Chalmeta &
Palomero, 2012). Some studies focus particularly on adapting of Balanced Scorecards (BSC) for
SMEs (Monk, 2000; Andersen, Cobbold, and Lawrie, 2003; Davig, Elbert, & Brown, 2004; Gumbus
and Lussier, 2006; Hakola, 2010; Giannopoulos, Holt, Khansalar, and Cleanthous, 2013; Basuony,
2014).
However, design and implementation of PMS in SMEs is a complicated matter that one
single model has not been satisfactorily solved, by one single modeldue to several obstacles
(Hudson, Smart, & Bourne, 2001; Garengo, Biazzo, & Bititci ,2005Bititci, 2005;Brem; Brem, Kreusel,
& Neusser, 2008; Chalmeta & Palomero, 2012). One of the main barriers for PMS application in
SMEs is non-formalized strategies, due to the fact that the strategic rationalization loop cannot be
used to transmute strategy into measurable performances. (Garengo & Biazzo, 2012). Also, PMS in
SMEs are challenged by the need for resources and low dynamics (Hudson, Smart, & Bourne, 2001).
Like many SMEs, BiBBR has the limitation of resources, notn-formalized strategy, and has also not
separated the strategic and the operating activities. Thus, BiBBR hais limitedation in the case of
application developed PMS models (See Table 2).
Table 2. Matching the PMS models for BiBBR
Matching for BiBBR
Models Main theoretical model characteristics
case
Organizational The model is divided into three levels The model is not
Performance The operational level is represented by processes measured. suitable for BiBBR.
Measurement The tactical level is where KPIs are tracked. The strategic level It is not possible to
is where key success factors (KSFs) are focussed. This model divide strategic
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Matching for BiBBR
case
(Chennell, et can be applied to SMEs where processes and levels are processes and
al., 2000) divided and can be cleared to identify and measure the operation processes
strategic processes. for BiBBR due to the
micro size.
Theory and The case study methodology used to analyze performance The model is not
practice in SME measurement. suitable for BiBBR
performance This methodology is strategic and requireds a significant due to the model
measurement number of resources. complexity.
systems
(Hudson,
Lean, &
Smart, 2001 )
Integrated The model mixes the accounting system and with activity- The model is not
Performance based costing. Financial performance and competitiveness, as suitable for BiBBR.
Measurement external dimensions, and costs, production factors, activities, The modelIt is
for Small Firms products, and revenues as internal dimensions, are connected appropriate for
(Laitinen, by a causal chain. This model is horizontal and developed for manufacturing SMEs.
2002) SMEs for easy implementation. BiBBR is not a
The model does not take into consideration the manufacturing
correspondence, the measures and a strategy. company.
Improving This model is based on an iterative performance The model can be used
control through measurement process. That model is enclosed in the for BiBBR in terms of
effective improvement cycle name – act – use – learn. continuous
performance The model starts begins to from the identification and improvement PMS.
measurement prioritization of business objectives and prioritization of them.
(Hudson The model was developed based on organizations in the
Smith & manufacturing sector.
Smith, 2007)
Methodology Model is defined into eight steps as the cycle of continuous The model is not
for PMS improvement. The methodology is based on the Balanced suitable for BiBBR
development in Scorecard. PMS-IRIS methodology has detailly specifically The model does not
SMEs described the design and implementation of PMS. However, it match BiBBR
(Chalmeta & does not take into consideration the non-formalized and capabilities due to
Palomero, unstructured strategy of SMEs. thebecause BiBBR does
2012) not have a
formalization strategy.
Adaptation of Monk (2000) recommended SMEs to develop business skills The models is not
Balanced such as business planning, financial planning, operational suitable for BiBBR.
Scorecard to management and control, financial management planning The design process is
SMEs and control, human resource management, awareness of the same as for large
Monk (2000), knowledge management, and an interest in e-commerce. companies:, vision and
Andersen, Andersen, Cobbold, and Lawrie (2003) recommended objectives setting,
Cobbold, and adaptation. Developing a Bbalanced Sscorecard methodology strategic formulation,
Lawrie (2003), with the development of the BSC for SMEs includes the same measure set, and
Davig, Elbert, & staples as for large companies. That means it is necessary to measures targeting.
Brown (2004), develop the physical documentation of the main components BiBBR does not have a
Gumbus and of the BSC to design the BSC. formalization strategy.
Lussier (2006), Davig, Elbert, & Brown (2004) offered the model based on BCS
Hakola (2010), as the simplified form of the original BSC. Two or three
Giannopoulos, separated measures for every perspective will be useful for
Holt, Khansalar, strategic planning. The research was based on companies
and Cleanthous with the number of 20-250 employees 20-250 people.
(2013), Basuony Gumbus and Lussier (2006) сonducted research on BSC as a
(2014) tool for continuous improvement to support SMEs’ growth.
Hakola (2010) presents the BSC model as a useful tool for the
legal reorganization process of SMEs.
18
Matching for BiBBR
case
Giannopoulos, Holt, Khansalar, and Cleanthous (2013) made a
review of BSC awareness and used within small companies
located in the United Kingdom (UK) and Cyprus. The research
showed significant unawareness ignorance regarding BSC in
SMEs in the UK and Cyprus, even when they used the financial
and non-financial performance.
Basuony (2014) compared BSC in SMEs and large companies.
The design process is the same as for large companies:, vision
and objectives setting, strategic formulation, measure set,
and measures targeting. However, the process is less
complicated and not as long as in large companies.
The circular The model is based on the with a bottom-up approach. That The model can be
methodology means to start from the operational activities, and and taken for BiBBR. Ddue
(Garengo & through success factors contract new performance measures, to the model is driven
Biazzo, 2012) while the top-down approach starts from strategy to translate from theits bottom-up
objectives into performance measures. approach.
DPM approach System Dynamics modeling The models is not
(Bianchi, Necessary to have special skills in System Dynamics. suitable for BiBBR.
Cosenz, & There is no specific
Marinkovic, skills in System
2015) Dynamics.
Thus, the bottom-up approach by Garengo & Biazzo (2012) is a more appropriate
methodology due to BiBBR’ is status as a micro company, and it does not have enough developed
infrastructure as a strategic processes to use the top-down approach. The c Circular methodology
includesd four phases (See Figure 5):
1. It is dedicated to uncovering what is usually kept under control. Generally, that is operating
activityies measures.
2. It is the description of the KSFs or critical success factors (CSFs) underlying the measures
under control.
3. It is the description of the desired strategy map as a result of the comparison between
controlled CSFs and the desired strategy.
4. It is the transferring of the map of the desired strategy to the panel of indicators necessary
for the implementation of the strategy.
The methodology makes explicit performance measures twhat support the company
success factors (Garengo & Biazzo, 2012).
Figure 5. The cCircular methodology by Garengo & Biazzo (2012)
19
The cCircular methodology is based on the implementation of the BSC (Garengo & Biazzo,
2012). BSC wThe BCS ias originally developed on the work of Kaplan and Norton (1992, 1996, 2001).
This model is the most famously and used PMS. BSC is characterized by Customer Perspective,
Process Perspective, and Learning Perspective (See Appendix 6 and 7). Financial Perspective is
measured by the company’s profitability. Customer Perspective is used in direct and indirect
measures. Direct measures are collected as surveysing, and opinions about customer satisfaction.
Indirect measures show market share and, customer retention. Process Perspective shows critical
business processes measures. Learning Perspective is measured to develop continuous
improvement. However, this basic set of perspectives can be adapted to the specifics of a
particular industry or enterprise. Strategic objectives, indicators that measure them, target values
of indicators, and strategic activities are interrelated. Performance measures represented in the
BSC should be financial and not financial (See Appendix 8) (Niven, 2014). Thus, BSC is the PMS tool
of choicsen for the BiBBR case, and as the tool of PMS. The BSC is going toit will be developed by the
circular methodology mentioned above.
In addition, in order for to BiBBR to can use and developed PMS, the continuous strategic
improvement process by Hudson, Lean & Smart (2001) was chosen. That process consists of the
number of recommendations, which are enclosed in the improvement cycle (name – act – use –
learn) (See Figure 6). At In the first phase, it is necessary to identify goals and select the people who
responsible for themat. After that,i In the second phase, performance measurements are
developed based on staff suggestions. IOn the next phase, data collection, and the reporting
system e.g. , feedback forms are identified. On tThe final phase reviews, the previous phases and
results are reviewing (Hudson, Lean & Smart, 2001).
Figure 6. Continuous strategic improvement process for SMEs by Hudson, Lean & Smart
(2001)
20
2.2. Management Control for Service SMEs
Management Control is represented by several types of control as : action or the behavior
control, the result control, personal control, and cultural control. Behavior and or action control
addresses direct control with hight interaction of employees, while, personnel and culture control
assume are indirect controlforms (Hutzschenreuter, 2009). The main characteristics of the types of
control are represented in Figure 7. SMEs can combine those types of control according to suitto
their needs.
Figure 7. Characteristics of the types of control (Hutzschenreuter, 2009)
21
Management control in service organizations is radically different from the control in
manufacturing companies. For service SMEs, it is important to control the quality of service. The
quality control system can include training, explanation of standards and value, audit and
inspection of service, and motivation. The particular tools depend on company specifics (Luther &
Schuster, 2014).
2.3. Financial Planning for SMEs
SMEs tends to obtain financial information for control purposes rather than for decision-
making. At On the top of that, it is very often then SMEs more often than not make decisions
without financial analysis or financial information. Also, one of the specifics of SMEs is that a the
founder is responsible for accounting, financial planning, and analysis. Financial planning principals
for SME are the same as for the large company. The financial measures depend on the specifics of a
particular SME. SMEs usually use some necessary financial and accounting tools. (Lucas, Prowle, &
Lowth, 2013).
According to CIMA research (2013), SMEs usually uses as financial and accounting
toolsproduct costing, break-even analysis, working capital measures, formal budgets for planning
and control, the cost-volume-profit analysis, responsibility centers/accounting, and financial and
accounting tools. (Lucas, Prowle, & Lowth, 2013).
Budgeting is a very powerful managerial tool process that enables the management to plan
and control operations. A Bbudget is a set of interlinked plans that quantitatively describe a
company's planned future operations Horngren (2002). Mostly, SMEs use operating budgeting.
SMEs usually provide a less formal budgeting process (Ebai, 2017). The budding process is
presented in Figure 8.
Figure 8. Budging Process
2.4. Performance Management Software

The IT market represents many offers for Performance Management software for different
capabilities and needs. SThesearchingin the open sources on the Internet showed several. The
software was sorted according to popularity, priced equall toy or less than $500 per month with
22
necessary features as like scorecards, strategic planning, budgeting and forecasting, KPIs. The
results of the selection is represented in Table 3.
Table 3. Performance Management Software
Software Price Capabilities
Board N/A Reporting, dashboarding, and data discovery
(BOARD, 2019) functionality, strategic, financial, and operational
planning, scorecarding
ManagePro $150.00/one- A project management tool for project and task tracking,
(Angbert Enterprises, time/user performance and meeting management, strategic
2019) planning. It provides a multi-display environment of
worksheets, timelines, and scorecards
Phocas Software $500.00/ Scorecarding, Strategic Planning, Budgeting &
(Phocassoftware, 2019) month/user Forecasting, Key Performance Indicators
Scopi $105.00/ Scorecarding., Control of project expenses and revenues,
(SCOPI IT, 2019) month/10 including cash flow. Editing strategic maps with
users perspectives and objectives
Andara $55.00/ Scorecarding, Budgeting, Forecasting
(Andara, 2019) month
Big Boss $99.00/ Software to create a business plan, manage documents,
(Big Boss, 2019) month/25 manage projects, assign tasks, manage meetings,
users overview company data
Kepion N/A Planning system included a system for the services
(Kepion, 2019) industry, Budget and variance reporting, project
planning
MODLR Corporate $30.00/ Scorecarding, Budgeting,
(MODLR, 2019) month/user
OnStrategy $500.00/ Scorecarding, Budgeting,
(OnStrategy , 2019) month
23
3. CHAPTER 3. RESEARCH METHODOLOGY
This chapter addresseds the technical research design of the master's thesis. The technical
research design includes the research strategy and the methods used for data collection and data
analysis matched to the type of research. Also, this chapter explains data collection and data
analysis boundaries, the explanation of the sampling selected, and the research quality measure.
Also, the research schedule is presented. The technical research design of the master’s thesis has
been created according to Research Methodology by Verschuren and Doorewaard (2010).
3.1. Research Strategy and Data Collection
According to the research classification, as described by Verschuren and Doorewaard
(2010), the master’s thesis is the practicale-, design-oriented research, it which provides the
knowledge and information that can be contributed to change the existing situation in BiBBR. The
research stakeholders are the BiBBR’s founders, the researcher, the research supervisor, and the
Rotterdam Business School. The master’s thesis combines two research strategies: the case study
strategy (BiBBR’s case) and the desk research strategy (for the theoretical framework of using
PMSs in SMEs, the practice of using IT system for SMEs to manage performance).
Case study strategy
The case study strategy is used for answering the empirical research questions and for the
core research questions such as collecting the expert’s opinion about BiBBR’s case and using the
theory. The case study (the single case) strategy has been chosen as a strategy for the master’s
thesis due tobecause the BiBBR case study matches the its characteristics:
 The master’s thesis aims to gain in-depth and full insight into BiBBR’s processes,
management control and performance measurement methods applicable to a small
company, expert recommendations of experts, practical solutions for SMEs, the limited
number of units is limited;, these processes which are confined in time and space.
 Data is mostly qualitative rather than quantitative due to the interviewing data collection
method (interviewing).
 The master’s thesis aims to obtain an overall and holistic picture of the research objects. A
random sample is not possible. The strategic samples are taken in terms of information
extracted from the research units.
 BiBBR is the research object studied in its natural context, the company as it works.
Research material and data collection for a case study
The master’s thesis aims to gain qualitative data. The quality displays in the process of a
qualitative, unstructured, and open way of collecting data. The data collection method is
individualpersonal, face- to -face (or by Skype) interviewing BiBBR’s founders, employees, and PMS
24
experts inPMS. The experts were chosen according to recent academic articles in the PMS field, and
their availability a person ion LinkedIn. The expert iInterview requests were made via LinkedIn.
Thus, threewo experts responded to a request for an interview:
 Professor Pietro Micheli, Professor of Business performance and innovation at Warwick
Business School, The University of Warwick (the United Kingdom). (Warwick Business
School, 2019)
 Professor Andrey Pavlov, Associate Professor of Organizational Performance, Action,
Execution, and Implementation at Cranfield School of Management (the United Kingdom)
(Cranfield School of Management, 2019).
 Professor Stefano Biazzo, Associate Professor of Innovation Management and Performance
Measurement, Department of Management and Engineering, University of Padova. The
profile is available on the website of the University of Padova. (The University of Padova,
2019)
The approach of the interview is based on open questions to analyze BiBBR’s business
processes, control gaps of control, and success factors. For experts, the interviews are based on
open questions to collect opinions on how to use the theory of PMS and , implementation in SMEs,
the opinion about BiBBR’s case and how to match theoretical solutions with BiBBR case
benchmarks for BiBBR.
Sampling for a case study
The sampling is representsed in Table 4.
Table 4. Case Study Sampling
Interview Ssampling for The explanation the bBasis ofor choicose
Interviewing
Founders of BiBBR The two founders of BiBBR were chosen for the interviewing as
 Ruben Paijens research sampling because they are the shareholders of BiBBR and the
 Martijn Bruintjes decision -makers of BiBBR. They know the BiBBR’s needs in terms of
success factors, development, and growth, as well as they.
Employee of BiBBR The full-time employee was chosen for the interviewing because, as a
 Wytse Visser the person responsible for project execution., Hhe knows the details
of control of the core business.
The fFreelancer working for He provided the marketing services for BiBBR. He was chosen for the
BiBBR interviewing because he has specific information about BiBBR
 Kevin van der Veer activities in advertising and brand awareness for clients and students.
The eExperts The experts were chosen according because ofto their academic
 Professor Pietro Micheli publications (some of the expert's academic publicationswhich are
 Professor Andrey Pavlov used in the literature review) and research interest in PMS,
 Professor Stefano Biazzo particularly for SMEs, as well as their availability their contact ion
LinkedIn and their consent to have interviews via the Internet for this
master thesis.
Interns and students were excluded from sampling because they do not make decisions.
Moreover, interns are responsible for small routine work.
The desk research strategy
25
The desk research strategy is used for answering the theoretical research questions. It has
been chosen as a strategy for the master’s thesis bin terms ofecause SME theoretical solutions for
SMEs matches the characteristics of the desk research strategy characteristic. There is no data
gathering,. Aall materials are collected by others and presented in databases. It is used in academic
recourses such as articles, scientific magazines, scientific, conference materials, books. Data
recourses for gathering information about PMS software are open specialized software websites on
the Internet.
Research material and data collection for desk research
The desk research is carried out by using secondary data from the literature, and media in
forms of scientific articles, journals, magazines, conference materials, books, expertise, standards,
and websites. The following engines and databases are goingwill to be used to collect data: Google
Scholar, University of Applied Science Mediatic, Erasmus University Library Database, and the
Internet websites for IT solutions websites. Those databases have been chosen due to validity,
availability, and ease of possibility to viewing citations. The search method is going to be used as a
data collection method to be used is the search method. In the process of searching for information,
the following keywords have been used: performance measurement, performance management
control, SMEs strategy, performance measurement system, service control, control practices of
control, management control benchmarks, budgeting, financial planning, IT systems or software for
performance measurement. Once specific information had isbeen identified from the research
materials mentioned above, the informationit is investigated for more detailed information. Also,
the supervisor presents a list of the most critical literature. Information from non-scientific
websites is used only for finding information aboutinvestigating software for SMEs in terms of PMS.
3.2. Data Analysis
The master’s thesis is consistsing of mostly of qualitative data. The approach to analyzing
qualitative data is deductive. Qualitative content analysis modifies a large amount of text such as
literature review and the raw data of verbatim-transcribed interviews into a highly-structured
summary of key results which corresponds with the data collected for this master’s thesis. Thereby,
Content Analysis, the qualitative data analysis method, is used. Content Analysishas been chosen
due to the qualitative content analysis modify a large amount of text such literature review and the
raw data of verbatim transcribed interviews into a highly structured and summary of key results, that
which corresponds to the data collected for this master’s thesis.Content AnalysisIt is conducted in
Microsoft Office Excel. The collected data regarding the theoretical framework of PMS and the
research questions is summarised and coded regarding the theoretical framework of PMS and the
research questions with the following labels: business overview, vision, and mission, strategy,
company's objectives, decision -making, market needs, success factors, management control,
performance measurement, financial performance, mandatory performance, KPI, automatization,
26
formalization, framework, literature and terminology, benchmarks, brand awareness, proposed
solutions, project control. The collected data is linked with the research framework to build the
conceptual model, formulating conclusions, and recommendations.
3.3. Research Boundaries
Other SMEs were not taken for interviewinged as benchmarks because it is hard to find the
comparable SMEs for comparable with BiBBR due to the specifics of its BiBBR business model,
limited availability of contact the with nearby SMEs, and specific BiBBR requirements in term
ofwith regard to managing the performance management of its business. Moreover, according to
the expert’s opinion of Pietro Micheli, start-ups are not comparable for to BiBBRcase. By the same
token, the expert Andrey Pavlov confirms that it is hard to find PMS benchmarks in terms of PMS
due to the uniqueness of system characteristics for in every organization.
3.4. Research Planning
The research plan represents activities which have to be done completed withave to in the
period. The research time- frame was planned according cognizant tof the Master of Finance
Program schedule, and the set days of submission and defense of the master’sr thesis, and
according theo availability of interviewees. According to the nature of qualitative research, the
data collection, data analysis, the development and verification of propositions are the interactive
process. The analysis during the data collection guides to shape the direction of data collection and
detect the gaps. Table 5 represents the research schedule of the research.
Table 5. The research schedule
Plan Start End

Pre-Research activities
Finding the research topic 03.09.2018 21.09.2018
Preliminary the problem background analysis 21.09.2018 11.11.2018
Finding the sponsor company 19.11.2018 20.12.2018
Preliminary analysis 20.12.2018 08.02.2019
Designing the master’s thesis 14.01.2019 31.03.2019
Performing the research
Desk research and data collection 07.01.2019 31.05.2019
Case study and data collection 20.12.2018 31.05.2019
Interview session 1 20.12.2018
Data analysis 09.05.2019 31.05.2019
Reporting 09.05.2019 11.06.2019
Draft versions 1 13.06.2019
Feedback 1 13.06.2019 27.06.2019
Data gathering, analysis, reporting 27.06.2019 03.07.2019
Feedback 2 03.07.2019 08.07.2019
27
Finalization
Final research report submission 08.07.2019
Defense 27.08.2019
The research planning schedule is from on one side hand plannings the conduct of the
research conducting, and fromn the another sihande plans, the preparation of the report. Regarding
the report preparation, according to tThe mMaster’s tThesis Gguidelines for Mmaster’s sStudents in
Finance and Accounting (2018), the final report hasprovides the layout for preparing the final report
according to the research project guidelines (2018).
3.5. Research Quality Measures

The quality of the master’s thesis addresses the following criteria (Kitto, Chesters, &
Grbich, 2008). Regarding the master’s thesis, the quality measures are the as followsing:
 Clarification and justification. The research objectives, questions, and methods fit the
research problem. BiBBR’s business processes, control, and goals are not integrated and or
coordinated with each other. In order The case study is used to understand how the possible
viability tof a change in the current situation, and, the case study is used. T the possible
theoretical and practical solutions are analyzed by desk study. The external research
objective addresses the problem by making recommendations to the small company
“BiBBR” about the design and implementation of management control and performance
measurement methods to support BiBBR's strategy execution. To match theoretical and
practical solutions with BiBBR needs, BiBBR will be analyzed in terms of capabilitiesy to use
them.
 Procedural rigor. The criterion Tis met by the holistic nature of the holistic quality approach
meets this criterion. The methodological explicitness of conducting the research follows the
holistic quality approach in the process of a qualitative, unstructured, and open way of
collecting data. The data collected will be accounted for according to its sources.
 Representativeness. The Interview samplesing for interviewing are represented by the
BiBBRfounders and employee of BiBBR. The company is small, so founders and one full-
time employee haveknow all information about the specifics of BiBBR’s business.
Moreover, the PMS experts in PMS are included in the sampling to contribute their
professional opinion on in terms of how to arrange better arrange BiBBR’s PMS.
 Interpretative rigor. Thise criterion is met by attracting the experts of the research objects,
who will be involved in the analytical process to make full data demonstration.
 Reflexivity and evaluative rigor. Reflexivity addresses the influence of researcher
relationships or the researcher's attitude to the research topic., Wwhile eEvaluative rigor
28
addresses ethical and political aspects. Regarding this master's thesis, there is one
researcher. Thus, the research is not the influenced byof researcher relationships.
Moreover, this study does not raise political, social, cultural, or ethnicity issues. Thus, the
researcher’s attitude to the topic of study is neutral.
 Transferability. The criterion is not fully applicable, fully due to the principals of the
Contingency Theory. The master’s thesis aims to find a solution for BiBBR. However, the
BiBBR represents the typical SME. Thereby, the results of the master’s thesis can be
transferred to other SMEs with similar business processes and organization structures as
the a benchmark but not as a solution. That is due becauseto the principals of the
Contingency Theory state that there is no single best way to arrange and manage processes
in all companies.
29
4. CHAPTER 4. FINDINGS AND ANALYSIS
This chapter is addresseds ato answering the empirical research subquestions. The
outcomes have based the data collected o in interviews with the sponsor companySponsor
Company and experts. This data consists of the analysis of key success factors of BiBBR's business
and the summary of the experts’ opinion about onthe way of improvementing PMS in BiBBR. Also,
this chapter presents the BiBBR’s strategy map, developed based on the analysis of success factors
and the circular methodology by Garengo & Biazzo (2012).
4.1. Key Success Factors Analysis
BiBBR is a service company. The Its core business of BiBBR is staffing for promotion actions
for large marketing agencies for promotion actions. These agencies plan promotion projects, deliver
provide all promotion materials for promotion with delivering and placing atto a destination,
provide students with materials for students withand a work descriptions, and of their work as well
as controlling from field promotion projects in a place of promotion actions. BiBBR is responsible for
ility is matching students with the projects and, providing studentsthem with information about
promotion actions. Thus, the key success factors of the core business is the quality of students’
works.
The quality of students’ work depends on in turn on several factors:
 Students’ personal characteristics (responsibility, sociability, interpersonal skills, self-
confidence, creativity, stress resistance, selling skills, thepersuasion ability skillto
convinces).
 Required professional knowledge (knowledge of the characteristics, properties features of
products promoted).
 Motivation (involvement in work, activity during a project).
 Students’ satisfaction.
Also, BiBBR’s business depends on finding new projects and clients,. The new projects and
clients are searched for throughthrough direct communication with projects managers of marketing
agencies. Thus, the success factors for the attraction of new projects and customers are:
 Customer satisfaction.
 Founders’ personal presentation, skills as the ability to convincepersuasion, negotiation
skills, and selling skills, presentation skills.
 Effective networking.
 The qQuality of information resources (using insider’s information, open sources).
 The BiBBR’s reputation of BiBBR.
 Increasing bBrand awareness and popularity.
30
The BiBBR’s business also depends on financial management. To survive and grow, a
company must cover its fixed expenses. According to the estimates of the company's founders, the
company's margin should is aboutbe at a level of 25%.
As it was mentioned in Chapter 1, for BiBBR, it is difficult to separate operational and
strategic success factors. Thus, based on the analysis of success factors, the new strategy map is
created. (See Table 6). This map shows display the causal relationship between the goals. This
mapIt is a basise of the PMS system.
Table 6. BiBBR’s strategy map
Objectives Performance drivers
- Price comparison with potential
competitors
Financial
- Comparison of students'
Increasing Cost controlling Keeping gross salaries for similar activities
turnover and optimization profit margin
- Networking with potential

clients
- Customer loyalty
Customer
Customer Increasing number - Increasing awareness and

satisfaction of projects hours increasing information field
-Reporting system and feedback
to customers
- Suggestions for improvement
- Project control
Building the fast- - Budgeting process and apps
Increasing quality flexible effective Introduction
Internal
of projects system of projects budgeting

staffing
Learnings and growth
- Leadership
IT development
- Knowledge management
Improve knowledge
Attracting the right
and skills of - Brand advertising
students
Brand awareness founders - Networking with students
increasing - Students evaluation
- Student preparation
- Rewarding systems
Financial perspective. BiBBR currently tracks its turnover and margin. However, for to
develop perspective development, BiBBR needs to control its cost and to look for reserves for
optimization. That can is possible for BiBBR as the introduction of financial planning and analysis.
The company does has not have long-term and short-term debts. Also, BiBBR does not, have
investments and or working capital. Therefore, the main goal for the company in the current period
is to cover its costs. The cost of student work is included in the price of promotions. However,
31
BiBBR can balance its cost for the students by analyzing the prices of their its competitors (suppliers
of staff) and salaries for of students for similar activities.
Customer perspective. Customer satisfaction is the core of the business. Customer
satisfaction is how measures how BiBBR’s service supplied by BiBBR meets the expectations of large
marketing agencies expectation. Customer satisfaction depends on projects quality and the
flexibility of BiBBR in terms of communication and project staffing. Also, from customers
perspectives, BiBBR needs to increase the itsnumber of projects. Based on the way method of
personal communication, the performance drivers depend on networking with potential clients,
personal communication, popularityzation of the BiBBR brand, increasing sources for searching
new projects and increasing information fields, providing reportings, feedback, and suggestion for
improvement to customers.
Internal perspectives. Once BiBBR has a clear picture of its customer and financial
perspectives, BiBBR the company can determine whether its internal process perspective captures
these critical activities such as projects quality, staffing system, and financial planning. The
performance drivers for these activities are budgeting and project control systems, as well as IT
development for managing processes.
Learning and growth perspective. It defines the core competencies and skills, the
technologies, and the corporate culture needed to support a strategy. BiBBR, as a micro company,
highly depends on the skills of the founders, and their ability to finds the right students. Also, for
BiBBR, is it is important thato the developed IT system provideds fast communication with students
and clients.
4.2. Expert Opinions
In order to improve the PMS for BiBBR, experts were involved. Experts They presented
their opinions about BiBBR’s case and methodology. To In summary up, experts they agreed that
there is no one single methodology suitable for all SMEs. So, a micro- company such as BiBBR
usually has an informal strategy process and goals -set. As a result, itBiBBR cannot construct its
market vision and in order to predicts markets needs for years. Thus, the a PMS design of PMS is
necessary to to begin starts from SME success factors of SME, and project futuhre company
expectations for the future. Regarding tThe number of measures, they should be not be many and .
Also, the formalization should exist but only to the extent of creatinge benefits for the company.
Regarding Also, performance governance, performance management reviews meetings areis a
better way to arrange the performance management system for BiBBR.
32
5. CHAPTER 5. CONCLUSIONS
This chapter addresses the answer to the core research question regarding improvement of
the PMS in BiBBR’s PMS, improvement the of project control improvement, and improvement the of
financial control improvement. This chapter presents possible solutions for BiBBR based on the
literature review, the Circular Methodology by Garengo & Biazzo (2012), and, the analysis of the
BiBBR’s success factors,; and developeds the strategy map. The offered solutions take into
accountcognizance of micro size the micro size of the company, and are based on principals at with
ease of use and the lowest cost.
5.1. Project Control Improvement
In order to improve BiBBR’s project control, it is ordered to use several control tools are
recommended. For BiBBR projects, it is important to control the following parameters:
 The kKnowledge about products and project.
 The aArrival time. Students should not be late.
 Work time. Students should not leave the place of work.
 Activity and involvement in the work.
Currently, the time of arrivaling is controlled by a picture sent by students to the project
manager. However, there is no control for a full day. It is offered for BiBBR is advised to use a
special platform to control monitor the location of students. According to the portal “Small
business in the UK,” StreeTimrtSmart, Turtler, myGeoTracking, TSheets, Track My Workforce, Labor
Sync, Nivaata Verayu, Hubstaff, Timesheet Mobile, and StaySafe are the best solutions for a small
service business. These platforms provide location tracking and timesheets of field staff. Moreover,
these platforms provide different features for managing people workers (UK Small Business, 2019).
Application of tracking app will solve a problems with the timing control. Also, the project manager
can see a problem in advance.
Regarding the quality of students’ work, when a company is hiring students, it should pay
attention to the initial interest of students and motivation. Personnel control can be used as
individual motivation and encouragement. Also, the company can use an action control as a policy
for a student, by with an explainingation of basic steps and having other students provide audits by
other students as “mystery shoppers.” They can check promotion points and provide the
evaluations of students’s work.
BiBBR can introduce the a rating system of students that rewards students with nd create a
rewarding system for the best ratings based on. The rating can be based on timing, feedbacks, and
evaluations from mystery shoppers as a 360-degree evaluation process, using. The evaluation of
specific evaluation software can be used. According to the portal, “Fit for small business,” the best
33
Performance Management portals for small company HR are AssessTEAM, Zoho People, Small
Improvements, Performance Pro, Engagedly, Lattice (Fit for small business , 2019). Thus, using
action and personnel control with a rewarding system can improve project control and constantly
improve customer satisfaction. BiBBR can choose specific software according to price and interface
convenience.
5.2. Financial Planning Improvement
To improve BiBBR i's advised to introduce budgeting, to improve its financial planning, it is
offered to applicate budgeting. Budgeting is the process of creating a plan for future cash inflow
and outflow, and comparing the plan with the actual resulting figures to, discovering of deviations.
A budget helps to discover monitor spending and predict the financial results, as well as it helps to
control cost, margin and provide break-even analysis.
The future inflow is based on available information about the planned projects, the
number of hours worked and wage per worker hour. The outflow is presented cost usually cared
for by BiBBR (See Figure 9). It is assumed that budgeting is carried out constantly on a monthly
basis.
Figure 9. Budgeting template for BiBBR
Items Plan Fact Deviation
1 Revenue
Hour of work
Income per hour
2 Direct costs
Cost per hour (student salary)
3 Gross profit
Gross profit margin
4 Indirect costs
Founder salary including tax
Team salary including tax
Full employee
Zero-hour contract
Office rent
Insurance
Representation expenses
Advertising buget
Additional cost
5 Income
6 Income tax
7 Net income
5.3. BiBBR’s PMS Improvement

The strategy map developed for BiBBR represents the its main goals for BiBBR. According to
the literature review, this strategy map should be transferred to BSC with measurable indicators
and targets. However, there is a challenge. It is not possible to measure all strategic goals. Thus,
BiBBR can use the information in the strategy map can be used by BiBBR as the focus zones to
create strategic initiatives. In order to track the business, the BSC was developed with some degree
of limitation (See Table 7).
Table 7. The BiBBR’s BSC
34
Objectives Measures Targets
Financial
Increasing turnover Euro 62 500 euro per months

the deviation between plan and
Cost controlling and optimization All cost planned
the actual cost
Keeping gross profit margin % 25%
Customer
Zero negative feedback from
Customer satisfaction Feedback from clients
clients
An increasing number of projects
Number of projects hours More than 2000 per month
hours
Internal
Feedback from the quality auditor Zero negative feedback from
Increasing the quality of projects
(mystery shopper) quality auditor
Filled budget for actual data and
Introduction budgeting Prepared budget
plan
Learnings and growth
Attracting the right students % of students with a high rating 100%
The BSC can help BiBBR track business better. Also, the BSC can be a base for developing
strategic initiatives for BiBBR. Moreover, according to the expert recommendation of the experts,
the developed system assumes periodic observation and discussion of these performance
measures and outcomes during performance management reviews meetings. Performance
management and customer satisfaction can be reviewsed in meetings possible to perform onces
pevery week, for quality measuresreviewing to track customers satisfaction. Financial and other
measures can be reviewed once per month. In those meetings, the targets can be changed, or new
performance measurements added for continuous improvement of the system.
Continuous improvement can follow the methodology developed by Hudson, Lean, &,
Smart (2001) presented in the literature review. SThe systematic review cycle name – act – use –
learn suggests improvement by discussing and collecting the ideas from staff. That cycle provides
simultaneous improvement of process and content. This methodology is fits for BiBBR, due to the
size of the company and the simplicity of the rules. For continuous improvement, it is necessary for
that the initiative comes from the founders. They should show their commitment to using and
improvingement PMS and translate that to the team.
35
6. CHAPTER 6. RECOMMENDATIONS
This chapter addressesd the research objective tohat makes recommendations to BiBBR on
how to improve its whole PMS as the whole system, and particularly in project control and financial
planning to support customers satisfaction and financial stability. Recommendations suggest the
founders' commitment to PMS.
1. BiBBR can introduce budgeting, which. Budgeting can help to plan and track future financial
performance. Budgeting can be introduced by using the developed excel template presented in
Figure 9 or specific apps mentioned in Table 3. Martijn Bruintjes, the founder is responsible for
internal processes,. He can use a budget template to plan financial performance measures and
calculated cost, turnover, revenue, and gross profit margin. It Also, needs to carry out
performance management review meetings are required. The discussion about the deviation
between plans and actual results can help to identify the causes and apply measures for the
future. A financial plan also contributes to financial rationality.
2. BiBBR can introduceу project control tools. The first tool is aApps are the first tool for tracking
the location of students during projects. The apps, are mentioned in part 5.1, are developed for
small businesses. According to the portal UK Small Business (2019), the cost of using thatose
apps are is low and acceptable for SMEs. The second tool is the action control of students by a
mystery shopper. A mystery shopper can audit and evaluate students’ work by using checklists
and scales for students evaluation. Next, the most important part is providing a personnel
control and rewarding system. Personnel control can be created in the form of a trusting
atmosphere that and translatesing company values to students. Also, it is possible to use
training, brochures, and open sources can be used to develop their skills. Moreover, a
motivational video for new students can be created for new students. Students should know
their possibilities for long-term quality work and their benefits. The rewarding system can be
based on a 360-degree evaluation process. BiBBR can use apps for to evaluate staff evaluation
or develop its own app.
3. BiBBR can use developed a balanced scorecard as a tool to improve the performance
management system. The BSC should be periodically reviewed for quality measures once per
week. Other measures should be periodically reviewed once per month. The revision can be in
forms of performance management review meetings. For continuously tracking BSC, it is
possible to use specific apps mentioned in Ttable 3. Those apps combine the functions of
financial and strategic planning. Also, MS Excel can be used as an alternatively option. All teams
should discuss data at performance management review meetings in order to develop strategic
initiatives.
36
4. BiBBR can focus on core factors use based on the developed strategy map to focus on core
factors. This map can be the basis for a real understanding of the hierarchical internal
relationships between the perspectives used, and for prioritizing future strategic company
initiatives. Continuous improvement of the PMS can follow the cycle: name – act – use – learn.
37
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42
SELF-REFLECTION
This master's thesis is my first significant research in Performance Measurement. That is

because of my skills and experience more concentrate more on financial analysis and valuation.
Thus, while ereby working uon thisder research, I faced hardship in the form of as a lack of
theoretical knowledge in case ofregarding Management Control and Performance Measurement in
SMEs. My I learneding from this that it is necessary to pay attention to problem analysis in order to
focus on the right direction in terms of discovering the theoretical framework.
Moreover, working ounder this research, I realized the importance of information
structuring. Information should be packaged according to logic, which leads a reader from a
problem to a solution. I should focus on logic and a goal of papers in my future work, as well as on
language improvement.
Also, having through interviews with the company and experts, I realize I should develop
my confidence and communication skills. Moreover, human qualities such as kindness and
responsiveness are very important even in research activities.
Furthermore, I learned the importance of discussion with experts on the thesis topic. The
discussions gave me the right directions and encouraged motivation, as well as it helping mewas
networking with exciting and intelligent people.
To sum it up, working uonder this master's thesis, I discovered more about my strengths
and weaknesses. Also, I also learned gained new knowledge about Performance Management.
Equally important is the fact that, I met interesting people. I hope these things will help me in my
future career.
43
APPENDICES
Appendix 1.The list of the main features of a PMS in SMEs

Performance measures PMS as a whole Performance measurement process
 Derived from strategy  All stakeholders considered  Periodic evaluation of existing PMS
 Link operations to strategic goals  Flexible, rapidly changeable and  Strategy development
 Simple to understand and use maintainable  Long- and short-term planning.
 Clearly defined/explicit purpose.  Balanced (internal/external,  Information sharing and
 Stimulate continuously financial/non-financial) communication
 improvement/right behavior  Synthetic (the performance  Manager’s commitment
 Relevant and easy to maintain measures should be  Employee involvement/support.
 Easy to collect straightforward, synthetic and  Facilitator
 Provide fast easily collectible)  Maintenance procedure
 Accurate feedback  Easy to implement, use and run  Systematic targets setting
 Monitoring past performance  Causal relationships shown  Roles assignment and responsibilities
 Planning future performance  Strategically aligned sharing
 Promote integration  Graphically and visually effective  Performance revision procedure
 Defined formula and source of data  Incrementally improvable  Linking performance to the
 Linked to the rewarding system. compensation process
 Integrated with an information  Procedures clearly defined
system  IT infrastructure support
(Cocca & Alberti, 2010)
44
Appendix 2. The Responsibility Assignment Matrix2
Ruben Paijens Martijn Bruintjes Wytse Visser Interns Students
Finding new
projects and Responsible Consulted Informed
clients
Responsible
Finding students Informed Informed Responsible
Accountable
Contracting
Consulted Accountable Responsible
students
Project planning Consulted Accountable Responsible
Project
Consulted Accountable Accountable Responsible
execution
Project reporting Consulted Accountable Accountable Responsible
Accounting and
Consulted Accountable Responsible
reporting
Developing IT Consulted Responsible
2
Responsible means those who do the work. Accountable means those who control and delegate work.
Consulted means those opinions are sought. Informed means those who are kept up-to-date on progress.
45
Appendix 3. BiBBR’s objectives
Goals Criteria Specific Measurable Attainable Relevant Time-bound
Reach out to all the 200+
potential marketing or Yes Yes Not for 2019 Yes Yes
communication agencies (clients).
BiBBR is a scale-up; business is
automated, focusses on
innovations in the way that BiBBR
has contacts with its client.
Innovations are the digitalization
No No No Yes Yes
of processes by using apps and
websites to excel in relationship
management to be reachable at
any moment, and way of working
with clients.
BiBBR’s turnover is growing from
375.000 euro to over 750.000 Yes Yes Yes Yes Yes
euro.
BiBBR’s gross profit margin is at
Yes Yes Yes Yes Yes
least 25%.
BiBBR has more control over its
Yes No No Yes Yes
financial model.
BiBBR covers the Netherlands
Yes No No Yes Yes
than it is nowmore.
The number of students is
Yes Yes Yes Yes Yes
growing from 150 > 350.
The number of hours that
students worked every month Yes No No Yes Yes
grows.
The internal processes of BiBBR
Yes No No Yes Yes
are transparent.
There are sharper students’
profiles and fitting tasks. That
means matching and helping
students with a student job that Yes No No Yes Yes
has a match with their profile,
education level, and individual
development.
46
Appendix 4. BiBBR’s Business Process
47
Appendix 5. Compliarisonce of BiBBR's PMS witho the main features of a PMS in SMEs
The main features of a PMS in SMEs BiBBR’s PMS
PMS as a whole
All stakeholders considered Not all stakeholders considered, the team and
students are not involved in PMS
Flexible, rapidly changeable and maintainable PMS is flexible due to the informal approach and the
small size of the company
Balanced (internal/external, financial/non- There are financial/non-financial performance measures
financial)
Synthetic (Since SMEs suffer from lack of Easily collectible as feedbacks and fact financial
resources, the performance measures should performance
be straightforward, synthetic and easily
collectible)
Easy to implement, use and run Easy to run
Causal relationships shown Simple independent measures
Strategically aligned There is no formal strategy; the PMS tracks the fact
projects performance measures
Graphically and visually effective The factual financial performance only
Incrementally improvable There is no processes
It is linked to the rewarding system There is not a rewarding system based on KPIs
Integrated with information system Financial measures and the number of projects
integrated with MoneyBird. There is not a common
information system for all performance measures.
Performance measures
Derived from strategy Derived from factual activities
Link operations to strategic goals
Simple to understand and use Simple to understand
The clearly defined/explicit purpose Clearly defined/explicit purpose as fact financial
performance
Stimulate continuously Measures show actual results, do not stimulate strategic
initiatives by revealing the necessary information
Improvement/right behavior There is not a rewarding system based on KPIs, so there
is no additional motivation
Relevant and easy to maintain A small number of performance indicators to measures
Easy to collect factual results
Provide fast
Accurate feedback
Monitoring past performance Monitoring past performance
Planning future performance There is no future planning performance measures
Promote integration Not applicable for this SME
Defined formula and source of data Measures based on the defined source of data.
Performance measurement process
Periodic evaluation of existing PMS Informally
Strategy development Informally
Long- and short-term planning Short-term planning only
Information sharing and communication Not applicable due to the size
Manager’s commitment Founders’ commitment
Employee involvement/support Employees are informed but not involved in the PMS
Facilitator Not applicable due to the size
Maintenance procedure Informally
Systematic targets setting There is no systematic targets -setting
Roles assignment and responsibilities sharing Informally between founders
Performance revision procedure There are is no performance revision procedure
Linking performance to the compensation Non
process
Procedures clearly defined Non
48
IT infrastructure support Partially, not for all measures
Appendix 6. The Balanced Scorecard Perspectives
(Niven, 2014)
49
Appendix 7. SThe Example of the Strategy Map
(Niven, 2014)
50
Appendix 8. Perspectives, goals, and indicators
Customers & Human Corporative

Financial Suppliers Processes Technology Resources Social
Responsibility
Revenue Growth quota Perfect order Investment in Degree of Number of
growth, per segment, fulfillment, new satisfaction, job offers,
Profitability, Profitability Order technological Percentage of Female-Male
Cash per customer, fulfillment Cycle equipment, new hire salary ratio
Flow Return on Customer Time, Cost of Investment in retention after relation,
Investment retention, goods sold, information certain % of
(CFROI), Return Percentage of Quality of the technology, period, materials
on Equity growth in the the production Percentage of Employee used that are
(ROE), number of process, Quality automated productivity, recycled
Reducing the customers, of processes, Number of input
working Customer product design, Degree to advanced materials, %
Capital,. Return satisfaction, Time to reply to which training of the volume
on Capital Quality of customers, databases are courses, of
Employed service Effectiveness, updated, Level Average water
(ROCE), Cash provided by Efficiency, of number of recycled &
flow per suppliers, Maintenance systems training hours reused
employee Quality of costs, integration. per employee,
received the Service costs, Readily
products that Service rate. available
are strategic
received, information,
Supplier meets Percentage of
delivery employees
schedule. linked with
information
systems,
Employees’
complaints,
suggestions
(Chalmeta & Palomero, 2012)
51
Appendix 9. Research Sponsor Information
STUDENT NAME:
STUDENT NUMBER:
TITLE:
Improving the performance management systems of the company "BiBBR" to support its
development.
COMPANY NAME: BiBBR
Address:
CITY: Rotterdam
Company coach
Name
Address
Email
Telephone number / Skype
52

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Master Thesis

Improving the performance management systems of the

Figure 1. BiBBR’s Business

Table 1. BiBBR’s control and performance measures

Appendix 1.The list of the main features of a PMS in SMEs

BSC - Balanced scorecard

This master’s thesis focuses on using Performance Management systems, Performance

Project Manager with a full-time contract

For project work

Searching for new project and clients

Planning the number of project hours to load students Lack of student

Searching for new students

3.4. Research Questions

This chapter attemptsddresses to answer the theoretical research subquestions. This

2.4. Performance Management Software

Plan Start End

3.5. Research Quality Measures

- Networking with potential

Customer Increasing number - Increasing awareness and

of projects system of projects budgeting

5.3. BiBBR’s PMS Improvement

Increasing turnover Euro 62 500 euro per months

Attracting the right students % of students with a high rating 100%

Andara. (2019, 06 30). Andara. Retrieved from Andara: https://andara.bi

Angbert Enterprises. (2019, 06 30). Angbert Enterprises. Retrieved from ManagePro:

Chong, H. G. (2008). Measuring performance of small-andmedium sized enterprises: the grounded

CIMA. (2008 ). Performance Measurement .

Fuller-Love, N. (2006). Management development in small firms. International Journal of

Garengo, & Bititci. (2007). Towards a contingency approach to performance measurement: an

Hutzschenreuter, J. (2009). Management Control in Small and Medium-Sized Enterprises.

Kepion. (2019, 06 30). Kepion. Retrieved from Kepion: https://www.kepion.com

Langwerden, E. F. (2015). Performance Measurement System Development in SMEs: Testing &

MODLR. (2019, 06 30). MODLR. Retrieved from MODLR: www.modlr.co/

Mohamed, R. (2011). Performance Measurement System (PMS) In Small Medium Enterprises

OnStrategy . (2019, 06 30). OnStrategy . Retrieved from OnStrategy : https://onstrategyhq.com/

This master's thesis is my first significant research in Performance Measurement. That is

Appendix 1.The list of the main features of a PMS in SMEs

(Cocca & Alberti, 2010)

Customers & Human Corporative

COMPANY NAME: BiBBR

Telephone number / Skype

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