Critical success factors in introducing performance measurement metrics for small and medium-sized enterprises (SMEs)

The rapid pace of technological advancement and the effect of globalisation have led to far-reaching modifications in the way business is conducted worldwide. Public and private enterprises alike have recognised effective performance measurement systems as a way to gain competitive advantage. This paper addresses the challenges faced by small and medium-sized enterprises (SMEs) in selecting an appropriate performance measurement system to gauge actual performance against their goals and objectives. The literature review was conducted by content analysis and the validity of the findings was tested by a survey on 50 SMEs in Nigeria. The results were analysed using the statistical package for social sciences. The paper had initially proposed six critical success factors that ought to be considered in the introduction of performance measurement systems in SMEs - these were derived from the extant literature. However, results of the empirical evidence suggest that the extant literature on performance measurement from developed economies do not align with findings from developing economies. Based on the findings, a new set of four critical success factors for a performance measurement system in SMEs of developing economies was proposed. These are believed to be better suited to the context of the SMEs and considered essential for them to benchmark their performance successfully against set goals and objectives.