An automated framework for business enterprise performance evaluation

Abstract

The evaluation of the performance of business enterprises has continued to pose challenges to business managers. Many approaches have been developed to address this problem, but most have been either input or output oriented, while some focus on specific tasks. These orientations do not give the total picture of a system's performance; thus, they do not sufficiently address the performance of the functional areas. By focusing so narrowly on specific orientation or tasks, they lose sight of the ‘big picture’ of the larger process of other common business processes. This study presents a framework that attempts to address these problems. The proposed framework combines the concepts of productivity evaluation with price recovery and profitability as performance measures, fuzzy logic and the rank-order centroid (ROC) approach. The framework presented evaluates the performance of a system's inputs and outputs at different functional areas simultaneously using productivity. Data from a manufacturing firm were used to demonstrate the proposed approach utility. The outputs productivity results were 1.28, 0.03, 0.07 and 1.86 for products 1, 2, 3 and 4, respectively. The firm had a total productivity of 0.98, total price recovery of 1.18 and total profitability of 1.16. The ROC ranked accounting and finance as the best functional area.