Improving public services’ performance measurement systems: applying data envelopment analysis in the big and open data context

Purpose This paper contributes to the field of public services’ performance measurement systems by proposing a benchmarking-based methodology that improves the effective use of big and open data in analyzing and evaluating efficiency, for supporting internal decision-making processes of public entities. Design/methodology/approach The proposed methodology uses data envelopment analysis in combination with a multivariate outlier detection algorithm—local outlier factor—to ensure the proper exploitation of the data available for efficiency evaluation in the presence of the multidimensional datasets with anomalous values that often characterize big and open data. An empirical implementation of the proposed methodology was conducted on waste management services provided in Italy. Findings The proposed methodology addresses the problem of misleading targets for entities that are erroneously deemed inefficient when applying data envelopment analysis to real-life datasets containing outliers. This approach makes big and open data useful in evaluating relative efficiency, and it supports the development of performance-based strategies and policies by public entities from a data-driven public sector perspective. Originality Few empirical studies have explored how to make the use of big and open data more feasible for performance measurement systems in the public sector, addressing the challenges related to data quality and the need for analytical tools readily usable from a managerial perspective, given the poor diffusion of technical skills in public organizations. The paper fills this research gap by proposing a methodology that allows for exploiting the opportunities offered by big and open data for supporting internal decision-making processes within the public services context.