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Economic Analysis: Theory and Practice
 

Simulation and evaluation of programs for performance management system development

Vol. 14, Iss. 3, JANUARY 2015

PDF  Article PDF Version

Available online: 18 January 2015

Subject Heading: METHODS OF ANALYSIS

JEL Classification: 

Pages: 18-28

Isaev D.V. National Research University - Higher School of Economics, Moscow, Russian Federation
disaev@hse.ru

Importance The paper focuses on the development of performance management systems that provide information support to corporate governance and strategic management. At present, the integral methodology of managing such systems' development is not available; therefore, establishing principles and approaches to evaluation and selection of programs for performance management assumes its relevance.
     Objectives The research aims to develop a methodological approach to evaluating programs for performance management systems development. The research tasks include elicitation of the features of programs for such systems development, as well as definition of methods and models allowing evaluation of alternative development programs and selection of one of them for implementation.
     Methods The paper is based on the analysis of existing methods of managing the development of organizational and technical systems. The conceptual model of a program for performance management system development has been built taking into account the essence and specifics of discrete-event simulation modeling. The specific features of evaluation of programs for performance management systems development include impossibility of financial estimation of their results (consequently, inapplicability of traditional investment analysis methods), as well as significant influence of uncertainty factor. Such programs should be evaluated relying on dynamics of the systems' maturity (in comparison with certain threshold maturity levels), with application of discrete-event simulation modeling. The main elements of the model include projects, events, development indicators and financial indicators.
     Results The results of the simulation serve for evaluation of development programs under effectiveness and efficiency criteria. These criteria may be supplemented by qualitative aspects estimated by experts within the framework of multiple criteria analysis of decisions.
     Conclusions and Relevance Evaluation of programs for performance management systems development should rely on the dynamics of such systems' maturity levels and appropriate financial indicators, taking into consideration stochastic nature of some parameters. I propose a conceptual simulation model of the system's development and substantiate the evaluation principles of development programs based on simulation modeling results.

Keywords: performance management system, development, level, program, simulation modeling, discrete event simulation

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