Activity-Based Performance Measurement and Social Networks

Robert Laubacher, MIT Sloan School of Management

The ABPM initiative is developing a method to measure performance at the activity level and to connect the resulting activity-based metrics with business unit and enterprise level measures of performance. This effort has the potential to assess the impact of IT investments and other management interventions, which typically must be made at the activity and process level, on a firm’s bottom line.

Our approach involves the use of MIT’s Process Handbook, which provides an underlying conceptual framework that will allow us to aggregate fine-grained, activity-level metrics at higher organizational levels and to generalize from case studies to suggest metrics that are applicable to broad categories of business processes.

This presentation will present an overview of the ABPM approach and discuss the two research sites where the model is being developed and applied—an RFID implementation at a large U.S. consumer packaged goods company and a wireless implementation at a leading technology firm. The talk will conclude by suggested ways that ABPM could be used to measure the value of social networks and to assess return on investment for management interventions designed to promote development of networks.