ENHANCING ORGANIZATIONAL PERFORMANCE THROUGH INTEGRATED ERP-BASED BALANCED SCORECARD SYSTEM: A CASE STUDY IN THE FURNITURE INDUSTRY
Didik Wahjudi, Henry Novianus Palit, Siok Ping

Postgraduate Program in Industrial Engineering
Petra Christian University
Jl. Siwalankerto 121-131 Surabaya 60236, Indonesia

Abstract

Organizations must continuously thrive to remain successful in the highly competitive business landscape. An integral aspect of achieving this success is implementing an efficient performance management system (PMS) that regularly monitors organizational performance. Large companies often employ Enterprise Resource Planning (ERP) systems to integrate data and information across various departments and business units within the company group, providing easy, comprehensive, and structured data collection. However, despite the advantages of ERP systems, a considerable amount of valuable data goes to waste as it is not integrated with the PMS of the company. To address this issue, this study aims to develop a balanced scorecard-based performance management system that utilizes the existing ERP system in a furniture company. In-depth interviews with the board of directors were conducted to assess the need for the PMS, formulate strategic maps and scorecard, determine scorecard weights, and establish targets for each scorecard category. During the implementation phase, it was observed that the financial indicators consistently fell below the baseline values, signaling an urgent need for management intervention. However, indicators from three other perspectives demonstrated relatively better performance than those from the financial perspective. This discrepancy emphasized the need to revise the strategic map, as strong performance in the other perspectives should translate into positive financial indicators. The management of the company validated the initial implementation results of the performance management system by noting a concerning decline in the liquidity. This study offers a real-world case study of developing a performance management system by effectively leveraging ERP data.

Keywords: Enterprise Resource Planning (ERP)- performance management systems- balanced scorecard- case study

Topic: Business and Economic