Abstract
The rapid development of technology has resulted in an unprecedented growth of businesses. The growth of businesses requires effective optimization techniques in order to achieve business success and sustainability. Businesses define vision and associated strategies in order to achieve business success and sustainability. The performance of the vision and associated strategies is managed by means of Key Performance Indicators (KPIs). The adoption of KPIs reveals the underperforming areas of the business strategy, as well as the areas that perform optimally. This makes KPIs a key tool in managing the overall performance of the business. The traditional methods of defining KPIs encompass fundamental gaps such as subjectivity to human knowledge and preferences. This results in nonrevolutionary and static KPIs that are unable to adapt to the changes in business areas such as staff, business units, functions, and processes. The objective of this study is to explore an approach to supplement traditional KPIs by looking at the business data, identifying relationships and trends, and creating new smart KPIs dynamically for optimizing business performance. The proposed approach adopts the digital technologies of the 4th Industrial revolution (4IR). The Optimization Smart KPIs Model (OSKM), which is based on 4IR digital technologies, is proposed and developed. The OSKM comprises two databases; 4-tier structured database that enables the storage of traditional KPIs with such characteristics as enterprise functions, business functions, organizational level, and KPI (name, frequency, type, perspective, formula, value, unit of measurement); and the simplified 2-tier structured database that enables the storage of each of the traditional KPIs with only the enterprise function and the value. The key features of the OSKM is genericity and data centricity; the model can be applied at any type of industry and is purely data-centric as it only depends on business data to optimize business. To evaluate the OSKM, two case studies are conducted; one at the open pit mining company and another one at the underground gold mining company, respectively. The open pit mining company encompasses four operational systems, one geology and mine planning system, and one Enterprise Resource Planning (ERP) system. These systems are assimilated through the vertical, horizontal, and end-to-end integration layers of 4IR. These integrated systems produce cross-functional KPIs (CFKPIs) on which the OSKM is applied. The application of the OSKM on the CFKPIs of the open pit Mine yields such outputs as discovery of the constituents of each business variable, discovery of intercorrelations and interdependencies between business variables, identification of the most important variables on the performance management of the Mine’s operations, optimization smart KPIs that reveal 16 the key drivers as business evolves and data changes, business strategy alignment, business optimization, process automation, predictive analysis, and change management. The underground gold Mine produces, amongst many, CFKPIs that manage the performance of conveyor belts, mining fleet, and mining equipment. The application of the OSKM on these CFKPIs produces the same type of outputs produced at the open pit Mine. This proves the genericity of the model and the capability to handle complexities from various businesses as each case study comprises different operational and management intricacies. The OSKM is a model that leverages such 4IR digital technologies as Artificial Intelligence (AI) and Data Analytics (DA), with the support of Internet of Things (IoT) and Cyber Physical Systems (CPS) to produce novel optimization smart KPIs that evolve with the changes in business and data. The model’s independence from human influence to produce and prioritize business KPIs reduces subjectivity significantly. This significant reduction in human subjectivity enables the alignment of business decisions to the actual, instead of supposed, business needs. The key value creation of this research is the OSKM that adjusts KPIs as the business evolves, providing new KPIs that best optimize the business as data changes, making the KPIs smarter.
D.Phil.Eng (Engineering Management)