Performance measurement of networks: towards a non-financial approach

Abstract

This paper suggests that a holistic network-level Performance Measurement (PM) system could be used to control the business process and to guide the actors in networks to pursue common targets of the network. However, in the current literature, empirical evidence on network-wide PM seems to be limited to financial measures. Financial information alone is not adequate for determining overall performance. This paper examines the case study evidence from several Finnish organisations. The results provide a state-of-the-art review on how inter-organisational cooperation is currently managed in Finland using PM. Based on the empirical evidence and historical evolution of measurement, this paper goes on to discuss and illustrate how the non-financial performance of networks could be approached on the level of individual measures from the overall network management point of view. An illustrative conceptual example is built around delivery accuracy. This paper also discusses some new insights in applying holistic PM in networks.