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

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 a 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.