Purpose - The purpose of this paper is to seek effective measurement
methods that reflect the real value of process capital.
Design/methodology/approach - From a system model perspective, the
authors refined the existing knowledge of process measurement by
distinguishing three kinds of indicator for the value of process
capital: input, output, and the capability to manage process capital.
The design of this study, therefore, incorporates a longitudinal
analysis of the content of process capital and traces its evolution by
attaching a monetary value to activities and assets. Findings - The
tested results reveal that the input measure is a less effective measure
for process capital, while the output measure is a valid one for
measuring operational and managerial performance of process capital. The
capability to manage process capital can predict all dimensions of
process capital in both the short- and long-term periods. Practical
implications - A practical view of process capital enhances the current
understanding of process capital by highlighting the sustainability of
process value and the validity of measuring output and management
capability of the process capital. Second, the study results also
explain the productivity paradox because of the complexity of the hidden
cost of process input and the distinctive capability of organizations
in managing technology and complementary resources. Finally, the system
view of process capital, from input through process to output of the
process capital, with operationalized measures, provides a useful
reference for examining intellectual capital. Originality/value - The
findings offer a more robust definition of process capital as a firm's
established capability to exploit the knowledge of business processes
and organize resources in designing and managing business activities for
sustained value.