The comparative study of performance information use in the strategic plans of the three case study offices indicates the use of outputs, outcomes, and KPIs to measure their performance. This comparative analysis lays a foundation for answering the two research questions (RQ1 and RQ2): Which categories of performance information do the managers use for improving performance and enhancing accountability? How is the information used? The three offices have improved their use of performance information significantly following the issuance of clearer regulation MOIA 54 2010, which provides step by step guidelines for preparing strategic plans. This improvement was initiated in their recent strategic plans, while the three offices mainly failed to present indicators in their previous plans.
This study revealed that formulating useful performance indicators was challenging for the three offices. Four main problems were identified. First, several output and outcome indicators did not meet the criteria for good performance indicators. Second, there was inconsistency between the strategic objectives and KPIs. Third, several KPIs failed to clearly identify the person or division responsible for meeting targets. Fourth, the KPIs were not all aligned to the four perspectives of the BSC.
The findings shed light on the conformity of the actual use of performance information in the three offices when compared with the framework developed in Chapter 2 (refer to Figure 4-1). This framework suggests that a way to promote effective performance information use is by informally aligning that information to the four BSC perspectives.
Table 4-15 summarises the conformity of the use of performance information in the three offices against the framework presented in Figure 4-1. It is clear from the table that the level of alignment of the KPIs differed among the three offices (the level of implementation can be seen from the shading). BETA’s KPIs consistently captured the four BSC perspectives in its strategic plan, annual plan, and performance agreement. Although under the same local government jurisdiction, the ALPHA successfully aligned its KPIs with the four BSC perspectives in its strategic plans, but failed to follow up the use of performance information in its annual plan and performance agreement. GAMMA’s KPIs also embodied the BSC, except for the absence of KPIs relating to the learning and growth perspective. GAMMA integrated KPIs in both its strategic plan and performance agreement, but not in its annual plan.
Table 4-15 also indicates that the ability of the offices to capture strategic issues related to the four BSC perspectives enabled them to formulate KPIs covering similar BSC perspectives. ALPHA’s strategic issues and its KPIs, for example, aligned with the four perspectives of the BSC. BETA and GAMMA showed similar linkages between the two components of their strategic plans. However, these two offices failed to formulate balanced and comprehensive strategic issues as they failed to address several perspectives of the BSC. Nonetheless, in developing their KPIs, the two offices could improve their KPIs. BETA’s KPIs aligned with the four perspectives of the BSC, although the strategic issues only captured three perspectives. Similarly, GAMMA aligned its KPIs with the financial perspectives but failed to address issues related to this perspective in its strategic plan.
Table 4-15: Summary of the conformity of the use of performance information in the three offices with the framework
OFFICES Customer Internal
business process Learning and growth Financial Others Strategic issues ALPHA BETA GAMMA KPIs Strategic plans ALPHA BETA GAMMA Annual plans
ALPHA Use output, instead of KPIs
BETA
GAMMA Use output, instead of KPIs
Performance agreements
ALPHA Use output, instead of KPIs
BETA GAMMA
The different alignment of the BSC in the three offices lays a foundation for examining effects of this alignment on the use of performance information. The ability to identify strategic issues related to the financial perspectives of the BSC enabled ALPHA to develop a strategy to generate other funding, rather than relying on the local government budget. The design of programs that focus on strengthening community participation for achieving its mission were effective in overcoming the problems of funding, as identified in its strategic issues. This contrasts with the other two cases, whose failure to identify issues addressing financial perspectives meant that there were no incentives for the two offices to overcome their financial difficulties.
Regardless of the problems in the formulation of performance indicators, the integration of performance information in planning provides evidence of progress in its use in developing countries. The importance of this integration has been highlighted in previous studies (Ammons, 2013; Ho, 2005; Liner et al., 2000), which assert that the integration of performance information has significant impact on its use in decision-making. This finding indicates that the design (refer to MOIA regulation number 54 2010) and implementation of performance information use in planning in the Indonesian Government has laid a foundation for such integration. However, further improvement should be considered by the Indonesian Government regarding the definition of proper performance information to address the four perspectives of the BSC.