Large-scale data envelopment analysis (DEA) implementation: a strategic performance management approach

Abstract

We present one of the first large-scale implementations of data envelopment analysis (DEA) at the heart of a permanent performance management system in its third year of operation. The system evaluates more than 1000 field unit operations devoted to disaster relief, emergency communications, and life-saving skills training. The following research objectives were accomplished: (a) advanced a conceptual model for measuring performance in the nonprofit sector; (b) adapted a DEA formulation to account for differences in the operational environment of the field units, and included service quality, and effectiveness measures alongside traditional efficiency measures; and (c) created from scratch data collection (service quality and outcome achievement survey instruments) and report generation tools necessary for the deployment of evaluation results to the field in an user-friendly format for managers. While the suitability of DEA for real-life performance measurement is demonstrated, challenges of a DEA implementation are also discussed.

Keywords:

• data envelopment analysis implementation
• performance evaluation system
• nonprofit social services
• benchmarking
• outcome measurement
• strategic planning