Customer-Centric Model for Performance Management in Banking Industry Using Soft System Methodology

Abstract

This research uses soft system methodology in exploring a real world problem in managing the performance of banks’ branches. In the first step, a rich picture is drawn based on the semi-structured interviews with experienced personnel and managers of Iranian commercial banks. Extracting a rich picture about the problem situation and roots of the problem, and based on literature review and well-known theories including resource-based view of the firm and service-profit chain, the paper proposes a conceptual model for customer-centric performance management system (PMS). The proposed model suggests an integration of customer relationship management system and PMS using customer lifetime value metric in managing the bank’s performance. The paper also discusses the benefits of this metric. In practice, the model has a potential to provide more strategic use of information system (IS) by increasing the use of managerial knowledge and strategy making being extracted from IS.