Digital Transformation and Flexible Performance Management: A Systematic Literature Review of the Evolution of Performance Measurement Systems

Abstract In the era of digital transformation, businesses must innovate and adapt to sustain a competitive edge. This dynamic environment compels a reevaluation of traditional management practices, highlighting the need for highly flexible systems. Flexibility, defined as the ability to adapt organizational resources, processes, and strategies in response to environmental changes such as rapid technological advancements, is crucial. Our systematic review of 47 studies investigates how digital transformation influences performance measurement systems across various industries and global contexts. We found that digital transformation fosters the dynamism and adaptability of these systems. This study integrates strategic, organizational, and information systems flexibility concepts that are essential for effective adaptation and resilience. Our findings underscore the shifts towards decision-making agility, inclusivity, and sustainability, stressing the significant role of human resources in adapting to digital imperatives. We advocate for a comprehensive approach that fosters digital literacy, upholds ethical standards, promotes continuous skill development, and enhances strategic adaptability. Practical implications suggest integrating digital technologies into performance strategies, utilizing real-time metrics for agile decision-making and emphasizing ethical and sustainable practices to improve transparency and stakeholder trust. These strategies are crucial for optimizing performance in the digital age.