Development of a Balanced Score Card for Knowledge Work in Project-oriented Engineering Organization: KPI Prioritization Using AHP

Abstract

This paper presents the development of a balanced scorecard (BSC) for engineering organizations providing knowledge work. The BSC was obtained through the selection of Key Performance Indicators (KPIs), using the Analytic Hierarchy Process (AHP). The BSC provides a strategic performance management tool that enables financial and non-financial KPIs to be used, to develop a balanced organizational strategy. Choice of KPI is a multi-criteria decision problem; therefore, the AHP method was used to select the most critical Performance Indicators (PIs). The AHP enabled the knowledge, information and experiences, to be synthesized in prioritizing the KPIs. This manuscript first describes the concepts of KPI and BSC, based on the available literature. Next, a case study in a project-based engineering-to-order (ETO) organization was conducted. The PIs were listed and compared pairwise, the chosen PIs were used to create a complete BSC and to develop a KPI dashboard, employed to monitor performance improvement in the case study company. In this study, it is suggested that implementing the BSC may help organizations providing engineering knowledge to monitor the organization's assets and better execute their strategy.