International Journal of Productivity and Performance

Prototype KPIs for rural infrastructure development: The practice of sub-district

local governments
Suchanya Posayanant Chotchai Chareonngam

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Suchanya Posayanant Chotchai Chareonngam, (2010),"Prototype KPIs for rural infrastructure
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Prototype KPIs for rural

infrastructure development
The practice of sub-district local governments
Suchanya Posayanant
Department of Teacher Training in Civil Engineering,
King Mongkuts University of Technology, Bangkok, Thailand, and

Chotchai Chareonngam
School of Engineering and Technology, Asian Institute of Technology,
Pathumthani, Thailand
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Abstract
Purpose It is difficult to manage and measure the effectiveness of
infrastructure development efforts of the sub-district local
governments called Tambon Administrative Organizations (TAOs),
the lowest level of local governments in Thailand. This paper aims to
develop and demonstrate the applicability of key performance
indicators (KPIs) based on the integration of balanced scorecard
(BSC) and value chain approaches.
Design/methodology/approach The processes of designing KPIs are
described with emphasis of how to apply a value chain model into
designing BSCs KPIs. Expert focus groups and case studies from
various parts of Thailand were conducted to give an insight into the
adaptation of the performance measures in infrastructure development
of TAOs.
Findings The application of a value chain model is critical for the
design of practical BSCs KPIs because they can be conveniently
embedded into existing practices. The case studies of prototype KPIs
demonstrate the performance measurement of infrastructure
development, which associates executive and operational views with
the hierarchy of scorecards.
Practical implications The prototype KPIs illustrate a quantifiable
measure that the councils and staffs can use to communicate
infrastructure development performance for target setting and
accomplishment.
Originality/value This paper addresses the key issue of how to
design KPIs based on the balanced scorecard and value chain model.
The integration of a value chain framework reflects the delivery
process of infrastructure development.
Keywords Local government, Quality indicators, Performance
management, Critical success factors, Value chain, Thailand
Paper type Research paper

Introduction
Rural infrastructure development plays a significant role in
rural economic growth and social development (Csaki and
Haan, 2003; United Nations, 2004). In Thailand, rural
infrastructure development is considered as the most
important agenda for local government services to
community. The latest Thai National Economic and Social
Development Plan (2007-2011) has focused on
encouraging local administrative units to apply the

standardized
delivery system
for
infrastructure
development.
To effectively
formulate
infrastructure
development
program, a plan
must clearly

KPIs for rural

infrastructure
development
717
Received February 2009
Revised December 2009
Accepted December 2009

International Journal of
Productivity
and Performance
Management
Vol. 59
No. 8,
2010

pp. 717-733
q Emerald Group
Publishing Limited
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DOI
10.1108/174104010110
89436

identifie
s
and
prioritiz
es
program
s,
projects
and
measure
s
to
assure
develop
ment
outcome
accompl
ishment
(NESD
B,
2001).
Tamb
on (subdistrict)
Adminis
tration
Organiz
ations
(TAOs)
were
establish
ed
nationwi
de
in
1995 to
enable
local
administ
rate
decentra
lized
governa
nce and
decision
making
at local
level.
Under
the Subdistrict
Council
and
Subdistrict
Adminis
tration
Act of
1994,
TAOs

are responsible for planning and managing the rural

infrastructure. This covers infrastructure development and
maintenance. It is the mission of TAOs to provide and
promote efforts aimed at the availability and accessibility of
infrastructure services. However, it was found that the
capability of councils and staffs were inadequate to perform
the
effective
infrastructure
project
development
(Leungbootnak and Charoenngam, 2003).
Similar to the global trends of decentralization, the Thai
government has tried to decentralize more infrastructure
development responsibility. TAOs presently follow the central
government policy guidelines as formulated in its strategic
plan, three-year plan and annual plan. The strategic plan states
in detail, the means of achieving the vision and mission
whereas the five-year plan serves as a general framework
within which the annual budgetary plan is prepared. As
mentioned, TAOs need much more aware and conscious about
the rural infrastructure services being transferred from the
central to local government. They include:
.
irrigation system (weir, retaining wall, spillway);
.
transportation system (road, bridge, waterway, pier);
.

building (timber/reinforced concrete/steel building) and

recreation areas (public park, meeting place, market, and
ground for sports);
.
water supply system (potable and agricultural water);
and
.
water disposal and treatment system (disposal tank,
drainage system).
The Thai governments goal is to rationalize and allocate
appropriate budget for local governments to develop and
maintain rural infrastructure. The government thus demands
TAOs to assure efficiency and effectiveness in the project
delivery based on the economic, social, and environmental
improvements. This paper is to outline how the KPIs for rural
infrastructure are specifically designed and to present case
studies on the applicability of such KPIs in reporting
performance measurement.
Background
In the early years, public organizations existed to fulfill
objectives focusing on delivery services to their citizens.
Therefore the critical success factor for the public sector
organization was the degree to which it fulfills its mission
(Bolton, 2003). However, in the trend of new public
management, public service agencies have been forced to
improve their operations, to achieve the increased demand of
tax payers (Brignall and Modell, 2000). To enhance
capabilities of public sector, the governments have adopted a
wide range of modern management instruments into public
organizations, especially strategic planning and performance
measurement. Public organizations have their mission
extended to achieve not only social goals, but also financial

goals
(Bozec
and
Breton,

2003).
Previous studies generally discussed economy, efficiency, and
effectiveness (Fowler and Boland, 2000). Many measures are
based on derivatives of this economy or input

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oriented perspective, usually expressed in terms of cost,

budget, and staffing totals. Efficiency is concerned with
the calculation of a ratio of input to output, demonstrating
how efficient an organization is converting inputs into
outputs. Measuring economy and efficiency is consistent
with the balanced scorecard of Kaplan and Nortons
(1992) in financial perspective. Finally, effectiveness is the
extent to which outputs meet organizational needs and
requirements. Measuring effectiveness is consistent with
non-financial accountability (Kloot, 1999).
In the late 1990s, the balanced scorecard (BSC) popular
technique used in private sector was introduced into public
sector. In advanced economies such as the UK, USA, Canada,
and Australia, the BSC appears to offer considerable potential
to public organizations in terms of contributing both to
improved performance and to improved performance
measurement (Kloot, 1999; Chan, 2004; Wisniewski and
Olafsson, 2004).

Originally developed by Kaplan and Norton, the BSC is

an approach to strategic management system (Kaplan and
Norton, 1996). The BSC is the approach to develop a set
of performance measures. Measuring performance has
become critical to local government success (Winsniewski
and Stewart, 2004; Chan, 2004; Mwita, 2000). Interest
among both performance measurement (Neely, 1999) and
key performance indicators (KPIs) as a tool for
systematically delivering measurements and key success
factors is well established in the management literature
(Goodpasture, 2003).
The BSC has been effectively implemented in not-for-profit
and public sectors (Smith, 2005; Hubbard, 2004; Holzer and Lee,
2004). To date, this framework provides necessary information
for the local government (Kelly and Rivenbark, 2003) to improve
performance management (Wisniewski and Olafsson, 2004). This
management tool is used as the central organizing framework
for important managerial process (Kaplan and Norton, 1996;
Brach, 2003). More than just emphasize in financial and
nonfinancial measures, the BSC translate mission and strategy
into tangible objects and a comprehensive set of performance
measures (Back et al., 2005; Verweire and Berghe, 2004).

As a public and not-for-profit, the organization requires

some modification for the BSC and deliver performance
measures that aligned with specific vision and mission
(Olsen and Olsen, 2005; Steiss and Steiss, 2003). These
organizations elevate the role of mission and customer, and
reduce the influence of financial perspectives (Niven,
2002; Kaplan and Norton, 1996). Especially in TAOs, the
organizations are dedicated to provide infrastructure
facilities and services that support people satisfaction

rather than
financial
gains.
Therefore,
the
scorecard to
measure
performanc
e
in
infrastructur
e
developmen
t
projects
fall
into
four
perspectives
:
(1) Miss
ion
effec
tiven
ess:
these
meas
ures
supp
ort
the
strat
egy
for
enco
uragi
ng
econ
omic
,
socia
l,
and
envir
onm
ental
deve
lopm
ent
that
inten
ded
to
impr
ove

th
e
qu
ali
ty
of
lif
e.
Pe
op
le
sa

tisfaction: supports the strategy for creating benefits

and satisfaction.
(3) Internal process: establishes the priorities for
operational processes that are important in creating
people satisfaction.
(4) Learning and growth: measures activities that create
a climate for innovation and growth support.
The value of the scorecard is its ability to provide the
strategic feedback (Winsniewski and Stewart, 2004) to show
the present status of the TAOs from four perspectives

IJPPM
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720

KPIs for
rural
infrastru
cture
develop
ment
719

template. The focus related to address specific performance measures reflect the
success with respect to planning, execution until completion and review of satisfaction
ensuing from the project.
As for infrastructure facilities and services, it is crucial to use performance
measurement as a tool to give decision makers an idea of how well those services are
performing (Kelly and Rivenbark, 2003; Gargen, 1997; Andrews, 2004; Neely, 1999). In
order to measure performance, the appropriate key performance indicators (KPIs) need
to be determined (Cox et al., 2003; Enos, 2000; Verweire and Berghe, 2004). A set of
structured KPIs, thereafter helps in tracking the desired performance and aids in
managerial decisions (Crager et al., 2005).
Method and procedures
Data were gathered for KPIs development using a combination of document reviews,
observations, focus group interviews, and case studies:
.

Document review. This covered guidance on rural infrastructure projects; roads,

water supply, irrigation supply, sanitation, water drainage, recreation areas, and
other local infrastructure. In accord with the three-year rolling investment plans,
TAOs strategic objectives and success factors were identified.

Observation. Observation in community and council meetings was used to gather

the perceptions on the perceptive outcome of existing infrastructure development
actions. Critical issues on satisfaction of infrastructure development outcome
were noted.
.

Focus group interviews. Consequently, ten experts (two academics, six senior
officials from the Office of the Permanent Secretary for Interior in the
Department of Local Administration, and two TAO chiefs), with experiences in
rural infrastructure development at least five years were invited to solicit their
perceptions on the prototype KPIs design and implementation.
.

Case studies. In total, 12 TAOs from different regions were selected for the
studies. The selection was based on: the readiness of information; willingness to
participate; and experiences in rural infrastructure development (see Table I).
Results
The results were organized into three sections. In the first section, the underlying
notions of the BSC approach are presented. It covers a brief background on
performance measurement framework and the perspectives necessary to build KPIs to
TAO region

Table I.
Characteristics of TAO
respondents

Tourism
Total

Note: n 12

define and measure infrastructure project performance in

TAOs. The second section employs the BSC concept and
related CSFs to provide a structured method of
measurement coincide the different phases of the value
chain model to develop a prototype KPIs. The third section
offers the completed results of an actual prototype
implementation, which are formally reported. The results
give evidence to support the KPIs used in the future in
TAOs. Finally, the conclusion drawn from the study is
presented.

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1
4

The development of the prototype KPIs

This section involves the development of prototype KPIs
by providing concrete example on how the KPIs would
look and support the rural infrastructure development in
TAOs. As a result, the four phases approach for developing
and using the prototype KPIs are:
(1) Identify critical success factors (CSFs) for TAOs.
(2) Identify value chain model of TAOs.
(3) Identify key performance indicators (KPIs).
(4) Confirmation of the prototype KPIs..
Phase 1: identify critical success factors (CSFs) for
TAOs
Critical success factors (CSFs) are the major items
significantly influenced the strategic achievement of the
project (Armstrong, 2003; Thierauf, 2001). When creating
the strategic objectives, there are four identified major
factors that are absolutely necessary for rural infrastructure
development success. The CSFs: achievement of
infrastructure to support social-economic development;
people participation; effectiveness of project delivery; and
employee competency, have been mentioned through four
BSC perspectives (Figure 1).
Phase 2: identify value chain model of TAOs
The term value chain model identifies the linked set of
activities ranging from primary activities to the ultimate
delivery of products and services. This model can be
applied to public service organization (Williamson et al.,
2004). The value chain model for TAOs provides a
template that offers a way of analyzing sequence of the
infrastructure development activities. Observations and
interviews of TAO chiefs during the second visits to TAOs
were found to be valuable in developing and refining the
value chain model. The observations during a visit to the
TAOs reveal the value chain model encompasses three

principal
activities:
(1) Cho
ose
the
valu
e:
plan
for
the
actio
n,
timin
g,
and
reso
urces
requi
red
for
rural
infra
struc
ture
deve
lopm
ent,
and
then
creat
e
infra
struc
ture
facili
ties
and
servi
ces
that
meet
peop
le
need
s.
(2) Prov
ide
the
valu
e:
carry
out

1
1

th
e
pl
an
w
he
re
ex
ist
in
g

infrastructure facilities and services are delivered to

people. This process monitors and controls the
development performance and progress.
(3) Attain the value: output refers to the delivery of
facilities and services response to the desired
outcomes.

KPIs for
rural
infrastru
cture
develop
ment
721

IJPPM
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722

Figure 1.
Translating critical
success factors with the
balanced scorecard for
rural infrastructure
development

DownloadedbyUniversitasGadjahMadaAt08:4915October2016(PT)

The focus
group
involving
the same of
ten experts,
as in phase
1,
was
conducted
to refine the
value chain
details that
arranged
into order
according
each step of
the
infrastructur
e
developmen
t
process.
Finally, the
paper
proposes the
value chain
model
as
instrument
to
align
performance
measuremen
t along the
different
developmen
t
stages.
Figure
2
shows
a
template of
CSFs meant
to measure
project
developmen
t
performance
that parallel
among the
value chain
processes.

Phase 3:

i
d
e
n
ti
f
y
k
e
y
p
e
rf
o
r
m
a
n
c
e
i
n
d
ic
a
t
o
r
s
(
K
P
I
s
)
T
h
e
p
u
r
p
o
s
e
o
f
t

h
e
O
n
T
h

B
a
C
h
P
r
A
t

e
devel
opme
nt.
The
real
value
of
the
proje
ct in
the
chain
is the
contr
ibuti
on to
the
achie
veme
nt of
quali
ty of
life
to
satisf
y the
need
s of
peopl
e
withi
n the
com
muni
ty.

K
P
I
s
f
o
r
r
u
r
a
l
i
n
f
r
a
s
t
r
u
c
t
u
r
e
d
e
v
e
l
o
p
m
e
n
t
7
2
3

IJPPM
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724

Figure 2.
Framework for
performance measures,
translate from CSFs and
value chain model

DownloadedbyUniversitasGadjahMadaAt08:4915October2016(PT)

Perspectives

Objectives

Key performance indicators

Unit/scale

1 Mission effectiveness

1.1 Economic development

1.1.1 Per capita income

1.1.2 Tax collection
1.1.3 Agricultural products
1.1.4 Industrial products
1.1.5 Tourist numbers
1.2.1 Employment
1.2.2 Migration/resettlement
1.3.1 Environmental management program
2.1.1 Satisfaction to the development plan
2.1.2 Satisfaction to the development timeliness
2.1.3 Satisfaction to the facilities and services
quality
2.2.1 Satisfaction to the benefit of infrastructure
3.1.1 Public communication
3.1.2 Public participation: planning
3.1.3 Public participation: control
3.2.1 Among the development sectors
3.2.2 Among infrastructure groups
3.2.3 Infrastructure maintenance
3.3.1 Completeness: planning
3.3.2 Completeness: control
3.4.1 Road and bridge
3.4.2 Electricity and water supply
3.4.3 Water resources and irrigation
3.4.4 Waste management
3.4.5 Other infrastructures
4.1.1 Mission and strategy comprehension
4.1.2 Public participation understanding
4.2.1 Trained employee
4.3.1 Income satisfaction
4.3.2 Work environment satisfaction
4.3.3 Empowerment satisfaction

Percent
Percent
Percent
Percent
Percent
Percent
Percent
Rate
Rate
Rate
Rate

1.2 Social development

2 People satisfaction

1.3 Environment development

2.1 People satisfaction

3 Internal process

2.2 People benefits

3.1 Public participation
3.2 Budget allocation appropriateness
3.3 Manage infrastructure development effectively
3.4 Infrastructure efficiency and effectiveness

4 Learning and growth

4.1 Mission and strategy awareness

4.2 Technical competency
4.3 Employee satisfaction

Rate
Rate
Rate
Rate
Ratio
Ratio
Percent
Rate
Rate
Percent
Percent
Percent
Percent
Percent
Rate
Rate
Percent
Rate
Rate
Rate

Table II.
The key performance
indicators of rural
infrastructure
development

developmentinf
rastructurerural
forKPIs

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726

Figure 3.
Translating key
performance indicators
with the balanced
scorecard and value chain
model for rural
infrastructure
development

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Phase 4:
confirmation
of the
prototype
KPIs
This
phase
describes the
findings from
the
focus
group
interview,
which
was
gathered from
participants
across
12
TAOs
participants.
Next is a
summary of
the guidelines
and findings
on
transcribing
interview
data:
(1) Applic
able to
TAOs:
.

TAOs
use
the
se
KP
Is
as
me
asu
rabl
e
indi
cat
ors
of
thei
r
pro
ject
dev
elo
pm
ent
suc
ces
s
tow

ar
ds
ac
hi
ev
in
g
th
ei
r
m
is
si
o
n.
.

T
h
e
K
P
Is
w
er
e
ti
e
d
to
th
e
fo
ur
B
S
C
p
er
s
p
e
ct
iv
es
.
T
h
e
in
di
c
at
or
s

en
o
u
g
h
to
su
p
p
or
t
th
e
m
ea
su
re
m
en
t
of
in
fr
as
tr
uc
tu
re
de
ve
lo
p
m
en
t
su
cc
es
s.

nfra
stru
ctur
e
dev
elo
pm
ent
obj
ecti
ve.
.

The
KP
Is
in
the
mis
sio
n
per
spe
ctiv
e
wer
e
con
sid
ere
d as
the
mo
st
tan
gibl
e
indi
cat
ors.
(2) Import
ance
for
decisio
nmakin
g
proces
s:
.

The
KP
Is
are
rele
van
t

T
h
e
K
P
Is
ar
e
a
h
el
pf
ul
p
er
fo

ces
ses
and
res
ults
of
infr
astr
uct
ure
dev
elo
pm
ent.
.
The
imp
rov
em
ent
of
infr
astr
uct
ure
dev
elo
pm
ent
is
bas
ed
on
pla
nni
ng
and
act
ual
dat
a in
the
KP
Is
dat
aba
se.
(3) Databa
se
readin
ess:
.

The
KP
Is
pro
vid
e

sp
ec
ifi
c
pr
ed
ef
in
e
m
ea
su
re
m
en
ts
w
hi
ch
en
ab
le
T
A
O
s
to
fo
cu
s
o
n
da
ta
ba
se
ac
ce
ss
.
.

T
A
O
s
h
a
v
e
d
at
a
b
as
e

re
pro
ject
s to
sup
por
t
tho
se
KP
Is.

or
s.
.

T
A
O
s
c
a
n
pr
o
vi
d
e
a
c
c
ur
at
e
in
fo
r
m
at
io
n
to
fi
ll
in
th
e
K
P
Is
fo
r
m
e
as
ur
e
m
e
nt
d
e
ci
si
o
n.

TAOs
need
to
keep
inform
ation
databa
se
current
.
(4) Inform
ation
accura
cy:
.

The
KP
Is
req
uire
unb
iase
d
per
son
nel
to
me
asu
re
per
for
ma
nce
bas
ed
on
the
se
indi
cat

R
es

u
l
T
h

A
s
E
x
T
h

KPIs for
rural
infrastruct
ure
developm
ent
727

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Figure 4.
Sample report
executive report

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the
ke
y
su
cc
ess
to
inf
ras
tru
ctu
re
de
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pp

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e
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72

IJPPM
59,8

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730

Figure 5.
Sample KPIs report
operational report
(mission effectiveness
perspective)

DownloadedbyUniversitasGadjahMadaAt08:4915October2016(PT)

KPIs have
been
correspond
ingly
identified
by the four
scorecard
perspectiv
es.
An
important
finding of
this work
is
KPIs
were
developed
and
measured
cooperativ
ely
with
the BSC
and CSFs
across the
value
chain
model of
TAOs. It
was used
to measure
the
infrastruct
ure
developme
nt success
account for
every link
in
that
chain. The
outcome of
this paper
is
the
prototype
KPIs that
guide the
practitione
rs through
the project
developme
nt process.
The
example
detailed of

t
h
e
p
r
o
t
o
t
y
p
e
K
P
I
s
d
e
m
o
n
s
tr
a
t
e
s
t
h
e
u
s
e
f
u
l
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e
s
s
t
o
m
e
a
s
u
r
e
a

c
c
T
h

b
s
a
u
manageme
d
nt tool that
g
can allow
et
TAOs to
i
evaluate
n
the
g
infrastruct
r
ure project
e
success
f
and
o
r
ultimate
m
achieveme
s
nt.
This
,
prototype
The
KPIs can
Inter
be a useful
nati
tool
for
onal
other
Jour
developing
nal
countries
of
that have
Publ
the similar
ic
environme
Sect
nt with the
or
sub-district
Man
local
age
governmen
men
t
in
t,
Thailand
Vol.
and seek to
17
provide
No.
evidence
4,
of
the
pp.
quality of
332life
44.
improvem
Armstr
ent of the
o
rural
n
people
g
,
therein.

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f
o
r
P
u
b
li
c
a
n
d
N
o
n
p
r
o
fi
t
O
r
g
a
n
i
z
a
ti
o
n
s
,
M
a
r
c
e
l
D
e
k
k
e
r,
N
e
w
Y
o
r
k
,
N
Y
.
T
h
ie
r
a
u

f
,

d
e
m
n
e
M
a
n
a
g
e
m
e
nt
,
V
ol
.
5
2
N
o.
7,
p
p.
6
0
21
0.
F
u
a
A
b
S
u

an Advisor
at
the
College of
Local
Administrat
ion, Khon
Kaen
Univeristy,
Thailand.
Chotchai
Chareonnga
m is an
Associate
Professor in
Constructio
n,
Engineering
and
Infrastructur
e
Managemen
t at Asian
Institute of
Technology.
His research
mainly
focuses on
how
to
improve
infrastructur
e
developmen
t
and
managemen
t. He has
journal
articles
published in
the area of
infrastructur
e
project
financing
and
budgeting.
He
is
actively
engaged in
pubic
sectors as
an advisor
and
researcher
aiming to
improve
performanc
e
of
program
and project

d
e
v
e
l
o
p
m
e
n
t.
R
e
c
e
n
tl
y,
h
is
r
e
s
e
a
r
c
h
h
a
s
r
e
s
u
lt
e
d
i
n
t
h
e
d
e
v
e
l
o
p
m
e
n
t
o
f
a
p

KPIs for
rural
infrastr
ucture
develop
ment

7
3
3

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