A metric and indicator performance measurement system for e-commerce organizations: A consensus analysis of their usefulness

Abstract

Electronic commerce (EC) is becoming a popular platform for online retail shopping and online payment, and it has become a new phenomenon of business transactions and innovation. In view of EC importance in global business transactions, surprisingly, there is no proper and appropriate system of performance measurement. Even if an EC firm were to measure performance, typically, the focus is on financial results using the traditional accounting system (AS) of measurement. The aim of this paper is to identify the metrics and indicators needed for EC performance measurement as the AS is inappropriate for many of the EC activities such as traffic flow, reliability of security of online payments, use of social-media data, etc. We first use a systematic analysis of selected articles to help us identify, understand and select metrics and indicators that are applicable for EC performance measurement. The Delphi method is then undertaken to conduct a questionnaire survey to gauge consensus of experts’ opinions with respect to (wrt) the use of those metrics and indicators selected. We found the respondents largely agreed that the metrics and indicators proposed by us are necessary or very necessary for use in EC performance measurement, although the experts consider three of the metrics proposed − traffic sources, emails subscribers and customer lifetime value be replaced with three accounting indicators (net income, return on investment and break-even points). The data is robust as it is verified by statistical tests. This study has both academic and practical implications; for the former, the metrics and indicators proposed meet the theoretical mathematical measurement system, and for the latter, the metrics and indicators proposed allows operation and strategic managers to design and develop an organization’s PMS.