Utilizing the balanced scorecard for IT/IS performance evaluation in construction

Abstract

Leading organizations do not stop at the gathering and analysis of performance data; rather, these organizations use performance measurement to stimulate improvement efforts and successfully translate strategy into action. In other words, they use performance measurement for managing their organizations. The most commonly used performance evaluation tool, the balanced scorecard (BSC) has been used extensively in the manufacturing, government, banking, retail, insurance and financial services sectors. This paper looks at potential applications and benefits of using the BSC as a framework to evaluate the performance improvement resulting from IT/IS implementation by a construction organization. The paper firstly seeks to adapt the original BSC concept to construction and then attempts to develop a performance measurement framework in the form of a tiered “Construct IT” BSC. The developed framework allows for the measurement of IT/IS performance at three different decision-making tiers (i.e., project, business unit and enterprise tiers). At each tier, a group of performance indicators are used to describe key aspects of activities that occur frequently enough to warrant meaningful measurement and comparison. The proposed framework applies the analytic hierarchy process (AHP) and multi-attribute utility theory (MAUT) to facilitate aggregating the obtained diverse performance measurements, thus giving rise to an overall IT/IS performance improvement measure (score) at each decision-making tier. To illustrate the application of the proposed framework, a project tier example is provided. © 2001, MCB UP Limited