CREATION OF A DYNAMIC MODEL BASED ON PERFORMANCE INDICATORS OF AN ORGANIZATION.

The understanding of existing interrelationships between performance indicators within a Performance Measurement & Management System (PMMS) is an ongoing topic of research. There have been many attempts to deepen the understanding of the relationships between performance indicators although this is not always well defined in PMMS methodologies. This paper presents a structured approach for quantitatively establishing these interrelationships based on a current set of indicators of an organization, through the creation of a dynamic model that simulates their behavior based on Interpretative Structural Modeling (ISM), autoregressive exogenous regression models (ARX) and System Dynamics theory. The procedure also allows the model to represent dynamic complexity such as delays, feedbacks and nonlinear relationships within a set of performance indicators. This can be used by companies to model and analyze their performance with an increased understanding about how their processes and areas are connected, thus improving competitiveness by focusing initiatives in the right spot. As a form of validation the procedure is applied to a set of indicators related in a preexisting dynamic model to show the application of the procedure and determine its effectiveness. [ABSTRACT FROM AUTHOR]