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Key Performance Indicator or KPI can be referred as the measurable attribute used to describe the method regarding how an organization is achieving its business goals. The organizations can utilize the KPI at various level for evaluating their success to reach the target. The high level KPIs primarily aims at the overall business performances while the low level KPIs aims at the particular operations that are conducted in various departments of the organization like the sales, HR, support and marketing department. The KPI is introduced in a business after determining some factors like the desire outcome, impact of the desire outcome on the business, method to measure the progress, method of influencing the outcome, method to know that the business has achieved the desired outcome and lastly frequency of the progress review towards the determined outcome. There are many KPIs that can be implemented in a business. For example: the financial metrics, Customer metrics, Process metrics and people metrics. KPI has a vast importance in the business as it helps to determine the progress of the business and also can indicate the time required for achieving the business goals by a particular business. Each and every business focused on their business goals.
This particular research will focus on the development of KPIs for supporting the digitization adoption in various SMEs. In today’s world maximum businesses are adopting the digitization methods to conduct their daily operations. This research will basically describe the need of KPIs while adopting the digitization in various SMEs. The research will be conduct a literature review which will showcase the importance of KPIs in adoption of the digitization methods in various SMEs.
This research study will primarily focus on the importance of the KPIs in adoption of the digitization methods in various SMEs. This research study will describe the method of using the KPIs in business, importance of KPI in the business, challenges faced while using the KPIs in the business.
Numerous business failed to achieve their business goals due to the lack of proper resources or many other reasons. One of the key reason is the lack of the pre – determined operations or goals. These businesses are unable to determine their business objectives (Holliman and Rowley 2014). Maximum business are using the digitization methods for performing their daily business operations. These operations are easily conducted by the use of the various digitization methods in the business. The adoption of the digitization comprise of few steps like customer experience, operational model, business model, leadership and technology (Markovitch and Willmott 2014). The KPIs can help those business to achieve their key business objectives and will allow them to reach their target in a quick and efficient way.
RQ 1: What are the impacts of KPIs in SMEs for adopting the digitization methods in their business?
RQ 2: What are the advantages of KPIs in a business?
RQ 3: How Various KPIs are helping the businesses to achieve their targets?
RQ 4: Which KPI should be used in the digitization process of a business?
According to (Volkwein, Böhm and Bauernhansl 2018), innovation culture as well as the strategic view is lagged by the SME s or Small and Medium-sized enterprises and for this particular purpose, specific guidance is required for the creation along with the operationalization of their digital strategies becomes a crucial factor. The main reason behind this is various kinds of difficulties might be faced by these kinds of firms in adaption of several changes for the implementation of new and advanced structures of IT if these firms lack is digitization strategies. There are several kinds of methods for the identification of the certain strategic goals for digitization and one of which forms the applications of the ongoing KPIs or key performance indices on those strategic options for the aim of the digitization of those strategies.
The KPIs could also be case specific for several portion of the products from which data is generated for further improvement of the development of product. Attention needs to get paid towards those kinds of requirement which are specified by the company like certain relevant KPIs or the structure which is followed by the organization (Biegler et al. 2018). The development of the KPIs for supporting the digitization adoption by SME indicates towards the development of several strategies for the achievement of digitization where the generation of new along with advanced ideas are prioritized and clustered too. Utilization of several digital models is becoming essential for the SMEs as well as the innovativeness of the company which in turn indicates towards the development of KPIs and implementation various digital strategies.
According to (Wiesner et al. 2018), digitalization has become one of the most challenging factors for the SMEs along with the improvement of their technological bases and keeping their business offers much attractive which in turn constitutes of several products bundled up with smart services for which development of the KPIs for the adoption of various strategies for digitization. It also focused on the advanced and a new maturity model which could be suitable for the SMEs in the process of adopting digitalization by the process of development of the KPIs as in some countries SMEs form the backbone of the manufacturing sector and which is essential.
A majority of people is employed by these kinds of firms and also helps in boosting the economic development of the countries. Smart services should be provided by the SMEs on the basis of the level of maturity of this kinds of firms (Ekren, Oberer and Erkollar, 2017). The analysis of several models of maturity becomes important for the digitalization of SMEs which also involves the development of KPIs. After the creation of the maturity model of for SMEs, the validation of the consistency of various categories of SMEs are done by both industrial and academic experts as well. Higher potential is possessed by the SMEs but at the same time they are also prone to risks. The basic criterion for the suitability of the maturity models is based on the adaptability of the organizational structure which is followed by the SMEs as both needs to be compatible with each other.
The benefits of smart manufacturing forms one of the success stories because of the adoption of certain digitalization strategies of SMEs by the process of the development of KPI by a major role is played which in turn could also be applied to most of the SMEs for the adoption of the digital strategies (Kleindienst 2016.). An important role is also played by the maturity model as it helps in guiding the SMEs by the method by which higher levels of maturity could be attained by them in specified domain such that they might be able to continue their progress with the utilization of correct strategies of business. The sustainability criteria of the SMEs also forms one of the most essential factors. By the previously mentioned methods, it becomes possible for SMEs in facing all the challenges regarding the implementation of smart services as well as smart technologies by the adoption of various strategies of adoption by the development of KPIs.
According to (Brynjolfsson and McElheran 2016), information has been grasped regarding the information which are related to the total number of KPIs or key performance indices which is linked with the cost, production to name a few could be tracked at the establishment phase (Nguyen Phuc 2019). The number of KPI have been interpreted in the form of an indicator for intensity of gathering of data at any SME for the development of the KPIs for the adoption of several strategies of digitization so that smart services could be bundled by SMEs on their products for smooth operationalization along with the improvement of the technologies which could help in the adoption of various strategies which could help in providing of attractive offers and in addition to this employing a majority of people in these kinds of firms (Mahmood 2019).
This criteria in turn helps in boosting up of the economy of the countries. The adoption of digitalization of strategies also indicates towards the adoption of certain processes of making decisions which are driven by data. This also involves the availability along with utilization of data. The key factor becomes the involvement of ten or more than ten KPIs for the processes of making decision that are driven by data. This method involves the utilization of both short-term as well as long-term target (Mahmoud et al. 2018). For the execution of these processes of decision-making in data-driven manner information technology needs to be invested on as various kinds of advancement in IT have transformed the measurement, communication as well as analysis within the firms. The structured practices of management are also taken into account by the execution of the processes for making of decision which is driven by the data that are present. The main reason behind this forms the better quality of data that helps in the creation of the opportunities in making better decisions with the utilization of new and advanced digital technologies (Nair and Shobana 2018). This responsible for huge increment of scope of data along with the scale of data which are available with the managers and it becomes easy for the managers in making right decisions by the utilization of data.
Research designs can be categorized in three various types: explanatory, exploratory and analytical or descriptive research designs (Myers, Well and Lorch Jr 2013). The descriptive or the analytical allow to gain and complete a particular research in more descriptive manner. The exploratory research design aims at better understanding of the research before conducting the research study. The explanatory research design is usually utilized to generate a relationship among two considered variable related to the research topic (Meyers, Gamst and Guarino 2016). This particular research requires an in – depth study of the research study and also require additional analysis of the real world examples of the impact of the KPIs in the digitization adoption in various SMEs. Therefore, the chosen research design for the research study is the analytical research design where it can be helpful to complete the study after gaining an in – depth analysis of the research topic.
This research study need data from both the real world sources as well as existing literatures. Thus, this research study will be completed by collecting data from both the primary and secondary sources (McPeake, Bateson and O’Neill 2014). The primary data will be collected in the form of survey forms and interviews. The survey form will require the views of various SMEs concerning the importance of KPIs in the adoption of digitization in their business. Interviews will also be conducted where the managers, board of directors will be interviewed to provide their views regarding the importance of the KPIs in their business and the type of KPIs used in their business (Johnston 2017). The survey will comprise of a questionnaire where the participants will provide their answers according to their experience. The secondary data will be collected by reviewing some online journals, articles and few successful stories of the KPIs in SME. The primary focus of collecting the secondary sources is to portray the importance of the KPIs in the business while adopting the digitization in a business (Dillman, Smyth and Christian 2014). Therefore this specific research will be conducted by collecting the data from both the sources namely primary and secondary.
As the research study will conduct a survey to collect the primary data or the quantitative data thus, the data needs to be interpreted in a simple form which can be done by transforming the collected data in a form of various graphs and charts. The collected data will also be converted in the percentage which will help to provide some conclusion regarding the research study (Thomson and Emery 2014). The data collected from the interviews will be immediately documented. The transformation of the primary data in a readable form will allow the researchers to achieve a proper knowledge of the comparison and comprehensive based on the collected data. The quantitative or secondary data that will collected will be analyzed in a thematic manner (Weerahandi 2013). The qualitative data will be analyzed and written by considering many themes which directly corresponds with the research topic. The data analysis part in this research will play an important role in this particular report as all the conclusions will be drawn on the basis of the collected data and their analysis.
As mentioned above that the primary data will mainly be collected in the form of survey. Thus, in the survey event 50 participants will be allowed to provide their views regarding the research topic. The participants can be the employees and customers of a business who will give their view - points related to the research topic and in the interview event, three or four managers will be interviewed and will be asked to give their perspective towards the research topic. There are two types of sampling techniques namely, random probability and non – probability sampling methods (Wu et al. 2014). In this particular research the random probability sampling techniques will be used as the participants will be chosen randomly and will be asked to provide their views. They will not be forced to participate in the survey event. The non – probability sampling technique can create many complexities in this particular research study and that is the reason for avoiding the non – probability sampling method.
The research study will follow some strict ethical considerations such that it can be completed without any failure and restrictions. Some of the ethical considerations followed by this particular research study are in survey event the participants will not be forced to enroll them in the event. This can be avoided by allowing the participant to sign a form which will showcase that they willing participated in the survey event and also they are not forced to enroll their name or they are not forced to alter their view – points (Lawton and Páez 2015). The survey form will not contain any sort of logo or diagram which can promotes any agency or business. Promotion with the help of the survey will create huge complexities for the research study. The participants can cancel their participant any point of time. The secondary data that will be collected from the online resources should be plagiarism free. The survey will not ask to mention any sensitive data of the participants.
Each and every research study associated numerous limitations no matter how they are well planned. Similarly this research study comprises of some limitations like the assigned time frame which can be a primary limitations for the research. The provided time can disallow the researchers to gather appropriate and sufficient of data related to the research topic (Shipman 2014). The time frame will be constructed by considering some additional time duration which can be used to manage any type of harm to the research study. The estimated cost is also a limitation for this research (Lefcourt 2013). The research study will aim to complete the analysis within the expected budget of the research study. The secondary data will be collected from the internet sources as mentioned above but lack of those resources will hugely impact the whole research study. Achieving an appropriate date for the interviews can also be limitation for this research study. The response gathered from the participants of the survey can be insufficient to draw a proper conclusion regarding the research topic (Queirós, Faria and Almeida 2017). Therefore this research study comprises of numerous research limitation which will be tried to avoid.
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