Performance measurement and management system 4.0: an action research study in investee NPOs by local government

Purpose The Fourth Industrial Revolution is increasing the use of digital technologies for delivering products and services. A performance measurement and management system (PMMS) is recognised as a useful system to guide era 4.0; however, the literature has not adequately addressed this challenge in public government and not-for-profit organisations (NPOs). This research aims to investigate the evolution of the PMMS adopted by a local government for the control of investee NPOs in era 4.0. Design/methodology/approach Through action research, the authors investigate an Italian municipality and its main investee NPOs. The project involved 4 researchers and 25 managers of the local government and NPOs. Findings This paper describes the design of a PMMS developed for a local government to control its investee NPOs. Considering the regulations and managerial needs, the designed system evolved from a fragmented set of indicators based on legitimacy and economic perspectives to a holistic set of indicators based on a comprehensive set of perspectives to consider the changing business environment. Originality/value This study sheds light on the design of a PMMS adopted by local governments for controlling investee NPOs in era 4.0. The paper contributes (1) to identify the main control needs for the design of a PMMS in a public network and (2) to capture the evolution of a PMMS in light of era 4.0 by developing two conceptual propositions.