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Universal Methodology for Objective Determination of Key Performance Indicators of Socioeconomic Processes

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Digital Business and Intelligent Systems (Baltic DB&IS 2022)

Part of the book series: Communications in Computer and Information Science ((CCIS,volume 1598))

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Abstract

The progress in the majority of socioeconomic processes (Processes) can usually be characterized by some headline indicator/index that is compliant with the essence of the Process. The Process develops by performing various process-driving actions; thereby a large amount of data is generated, which forms specific indicators that are more or less distinctive for the Process and its headline indicator. No Process management can really perform all the relevant actions to achieve progress of the whole set of indicators. Hence, prioritization of the action lines and determination of the key performance indicators (KPIs) has become an essential factor. Unfortunately, KPIs and their weighting are still largely subjectively defined and there is a lack of qualitative and quantitative justifications for choices. The article describes the universal methodology developed for objective mathematical computation of KPIs of the Processes and determining their weighting. By means of the regression analysis algorithms for statistically significant KPIs are computed and mathematical expression has been obtained showing the impact of each selected KPI on the headline indicator. The methodology has been tested in several Processes, achieving convincing results; applying it to variety of Processes requires mediocre programming skills only. Process management can put the methodology into practice to monitor the achieved development level of the Process in statics and dynamics, to observe progress and deficiencies in separate aspects, to take these into account when making the sustainable planning and strategic decisions.

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Acknowledgment

The study has been supported by the Latvian Council of Science project lzp-2021/1-0108 “Sustainable management of the urban heating system under EU Fit for 55 package: research and development of the methodology and tool”.

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Authors and Affiliations

  1. University of Latvia, Raina Blvd. 19, Riga, 1586, Latvia

    Girts Karnitis, Janis Bicevskis & Edvins Karnitis

  2. Riga Technical University, Meza Street 1 k1, Riga, 1048, Latvia

    Andris Virtmanis

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  1. Girts Karnitis
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  4. Edvins Karnitis
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Correspondence to Girts Karnitis .

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Editors and Affiliations

  1. University of Novi Sad, Novi Sad, Serbia

    Mirjana Ivanovic

  2. Riga Technical University, Riga, Latvia

    Marite Kirikova

  3. University of Latvia, Riga, Latvia

    Laila Niedrite

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Karnitis, G., Bicevskis, J., Virtmanis, A., Karnitis, E. (2022). Universal Methodology for Objective Determination of Key Performance Indicators of Socioeconomic Processes. In: Ivanovic, M., Kirikova, M., Niedrite, L. (eds) Digital Business and Intelligent Systems. Baltic DB&IS 2022. Communications in Computer and Information Science, vol 1598. Springer, Cham. https://doi.org/10.1007/978-3-031-09850-5_4

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  • DOI: https://doi.org/10.1007/978-3-031-09850-5_4

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-031-09849-9

  • Online ISBN: 978-3-031-09850-5

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