Shown below is the fundamental entity relationship model that serves as the foundation for public sector performance measurement: financial resources drive human and capital assets into activity; the activity results in outputs; and over a period of time, the outputs have effects (or outcomes) that support the Strategic Objectives of the organization. The key to measuring and evaluating performance in the public sector lies in the determination of the relationships R1 through R4, tasks that Azalea Systems is intimately familiar with.

The effectiveness of an organization can be evaluated by determining the level of influence the Outputs and External Factors have upon the desired Outcomes. Measuring the Effectiveness of a Federal Agency and Measuring Effectiveness of a School System provide examples of how those relationships can be determined and demonstrate that these concepts are applicable at all levels of the public sector.