Agile performance measurement system development: an answer to the need for adaptability?

Kati Tuulikki Stormi, Teemu Laine and Tuomas Korhonen

Journal of Accounting & Organizational Change, 2019, vol. 15, issue 2, 231-256

Abstract: Purpose - The purpose of this study is to reflect upon the feasibility of agile methodologies, Scrum in particular, to supplement the procedural design and implementation of performance measurement systems (PMS). Design/methodology/approach - The study is an interventionist case study that applied agile methodologies in the PMS development. Researchers actively participated in the PMS development, e.g. researchers designed some of the performance measurement prototypes in order to facilitate the agile development. Findings - The study outlines an agile approach suitable for PMS development. The paper answers the topical needs for adaptability and agility in management accounting, by applying agile methodologies into PMS development. PMS development does not take place only as a project or process that systematically progresses from the measure selection to measure implementation. Instead, as the requirements for the PMS change during the development project, management may reject some measures and new measures emerge as the understanding about changing situations increase. Agile methodologies are a methodological way to respond to the inevitable change and to enhance management accounting adaptability. Research limitations/implications - This study contributes to the PMS literature by proposing that agile development methodologies can advance organizational features that increase management accounting adaptability. As a result, the study proposes a new approach for PMS development to supplement existing ones. Agile methodologies are especially suitable for extending the PMS in new, yet relatively immature areas of performance measurement. The new approach applies Scrum principles in PMS development. By drawing from the theories of performance measurement (system) development and enabling PMS, the paper furthers academic understanding about agile development of accounting information systems. Practical implications - Companies can use the proposed approach in PMS development, particularly after the initial system implementation in redesigning the system. The approach may increase the PMS impact in organizations and prevent PMS implementation failures. Originality/value - The paper identifies the potential of using agile methodologies to enhance PMS adaptability and provides preliminary evidence of the potential of such approach in supplementing processual PMS development frameworks.

Keywords: Performance measurement; Agility; Management accounting change; Performance measurement system development (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaocpp:jaoc-09-2017-0076

DOI: 10.1108/JAOC-09-2017-0076

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