Performance Measurement System in Telecommunication Services: A Study of Select Indian Companies

Performance Measurement System in Telecommunication Services: A Study of Select Indian Companies

Vinod Kumar Yadav (Harcourt Butler Technological Institute, Kanpur, India)
DOI: 10.4018/IJPMAT.2017070103
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Abstract

Fast changing technology, increased competition and dynamics in consumer usages in telecommunication services has sidelined the company's focus of excellence in services shifting their strategy from customer to technology. This has further led to increased non-standardized services in telecommunication services in India. The aim is to not only sustain in field, but also compete in the market. This study is an effort to address the questions, which includes: (a) the different performance measurement systems adopted by Indian companies in telecommunication services; (b) the approaches used to measure the performance of the organization in telecommunication services in India; (c) the different factors distorting the PMS of the organization and (d) the effectiveness of PMS and need for the change in the existing PMS. The primary data as well as secondary data has been used to decipher the trends in performance measurement practices in telecommunication services in India. The findings of the study indicate the inspiring facts to study the performance measurement system in India.
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3. Literature Review

The mid-20th century witnessed the causes for evolution of measurement and its importance. The industrial revolution also led to the same in order to cater the need of investors in big projects. Johnson (1983) also advocated this concept of performance measurement evolution as followed by a few other researchers such Dixon et al. (1990). The budgeting and financial accounting augmented by Activity Based Costing (ABC) method leads to bottom line measurement by focusing on activities and deriving unique measures for each activity. This ABC method seemed a milestone in traditional structure having more formalization. ABC systems mainly focus on activities required to produce each product or provide each service based on each product's or service's consumption of the activities (AICPA, 2005).

ABC is the costing model that identifies the cost pools or activity centers in an organization and assign the costs to products and services (cost drivers) based on the numbers of events or transactions involved in the process of providing a product or services. As a result, ABC can support managers to see how to maximize shareholders value and improve corporate performance. (Valuebasedmanagement.net, 2005). Robert Kaplan and Steve Anderson also suggested improved version Time-driven Activity Based Costing to sidestep the difficulties associated with large-scale ABC implementation (Kaplan & Anderson, 2004). The time-driven ABC also facilitates the managers to estimate the resource demand imposed by each transaction, products or customer rather than relying on time consuming and costly employee surveys. The ABC method appeared to be a valuable instrument in many developing countries like India especially in service businesses (Yadav, 2006).

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