Requirements for Simulation Analysis to Support the Design of Individual KPIs for an Organization Strategy Realization

An Example of Sales-Organizations

Abstract

Balanced Score Card (BSC) is proposed as a method to translate an organization strategy into Key Performance Indicators (KPIs). How many KPIs are required for each perspective is an important research issue. It is hard to design appropriate KPIs to satisfy the required perspectives. Agent-based simulation can be an effective tool for managers' decision support about the KPIs design. In this paper, we clarify requirements for agent-based modeling for the design of KPIs. The requirements consist of defining the type and the characteristics of an organization, specifying assumptions, designing the parameters, and analyzing scenarios. The simulation satisfying the requirements can analyze effects of how KPIs are weighted in an organization under strategic questions.