Measuring performance in small and medium enterprises in the information and communication technology industries
Creators: name: Wu, Donglin
Publisher: name: RMIT University
Year: 2024

description: Small and medium-sized enterprises (SMEs) in the information and communication technology (ICT) industries play a crucial role in the new economy. Most SMEs operate in a fiercely competitive environment; as such, it is important to optimize business practices. It is believed that performance measurement (PM) tools can help to identify weaknesses, clarify objectives and strategies, and improve management processes. While many theories on performance measurement and performance management have been developed mainly for large organizations over the past two decades, few have been tailored for SMEs. In addition, research highlights that these tools are difficult to adapt for SMEs.<br><br>This research aims to identify and investigate the critical factors influencing the performance of SMEs in the ICT industries and, in doing so, develop a new PM framework that is able to effectively measure SME performance. <br><br>To improve the accuracy of the judgments in this research, methodological triangulation strategy, which mixes both qualitative and quantitative approaches, was employed. At the same time, data-source triangulation was applied to reduce the impact of potential biases. In qualitative research, twenty interviews were conducted, sixteen cases were analysed through cross-case analysis. In quantitative research, sixty-six valid responses to questionnaire surveys were collected. <br><br>This thesis has completed three major tasks: 1) Investigated critical success factors that affect the performance of SMEs. 2) Analysed existing SME performance measurement techniques in order to identify the best framework for SMEs in ICT industries. 3) Constructed a practical PM framework and implementation strategy for best-practice PM in ICT-related SMEs. <br><br>Research results show that an effective PM system for ICT SMEs should help the companies to formulate right strategies that can especially manage the uncertainty of the external environment in their development. Importantly, a PM process should be constructed which aligns with the SMEs' daily processes such as ordinary planning, budgeting and reporting processes. Such a PM system should involve a flexible PM framework that can be adapted dynamically to suit the changes in the PM process. It is also required that the PM framework help SMEs identify customer needs, manage and measure customer satisfaction. <br><br>A PM framework meets the above requirements can be built based on the structure of business excellence models and the theory of system management. At the same time, the KPIs should be incorporated in the PM system to help design the PM framework. The constructed PM framework involves measuring both performance determinants and performance results. The performance determinants, including both internal determinants and external determinants, are represented in following dimensions: capability building; resource developing and utilizing; environment adapting; strategies formulating; internal process managing and PM on innovation and learning. The performance results' dimension should include the financial results to satisfy the investors, the customer satisfaction indicators to meet customers' needs, the competitive indicators to reflect the competitive advantages, and the collaborative measures to measure the partnership.