Into the Unknown: Measuring the Business Performance of RFID Applications

Given the unquestionable importance of performance measurement on the one hand and the promise of large-scale economic gains through the application of RFID technology in business processes on the other, a crucial question arises: To what extent do RFID users measure the economic performance of their applications and how is the success of RFID applications affected by performance measurement? This contribution presents the first empirical evaluation of RFID performance measurement behaviour as far as we know, conducted among 146 German companies. Following an extensive review of performance measurement methods in the RFID field, a categorisation with respect to criteria such as financial and comprehensive measurement is presented. Subsequently, the empirical analysis reveals that partial measurement methods, covering isolated aspects of RFID investments, exhibit the highest usage frequency. Furhermore, we find that RFID users tend to apply several methods in various combinations, depending on factors such as firm size and duration of application. Accordingly, four different types of RFID performance measurement users are derived. Finally, a connection is established between performance measurement and business success of RFID applications: Hence, usage frequency of particular measurement methods is significantly connected to the improvement of target variables such as lead time and labour costs.