A model for investment justification in information technology projects

School of Architecture and Building, Deakin University, Geelong, Victoria 3217, Australia
International Journal of Information Management (Impact Factor: 2.04). 10/2001; DOI: 10.1016/S0268-4012(01)00024-X

ABSTRACT To remain competitive and ever increasingly sophisticated in the marketplace, businesses must invest in Information Technology (IT) if they are to survive in the long-term. Advances in IT have enabled new competitors to enter existing markets more readily, which has stimulated and strengthened the paradigm of global competitiveness. At the same time, increasing economic pressures are forcing businesses to re-evaluate their IT operations. In response to the changing business environment and to remain competitive and improve organisational performance some businesses have strategically made considerable investments in IT, yet their benefits are difficult to quantify. With this in mind, this paper aims to study the justification for investment in IT projects, by examining tangible and intangible benefits such as competitive advantage and securing future business by facilitating appropriate management change. A model to determine whether or not to invest in IT for any given company is presented. The developed model is then applied to a case study to analyse the implications of implementing IT and its impact on organisations.

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Available from: Peter E.D Love, Aug 25, 2015
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    • "Today customers are from every corner of the world; the supply chain strategy should have focus towards satisfying the customers. Without satisfied customers, the whole exercise of applying the supply chain strategy could be costly and futile (Gunasekaran et al., 2001). For improving performance, supply chain metrics must be linked to CUS (Lee and Billington, 1992). "
    Dataset: 02 Agarwal
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    • "This is especially the case when considering logistic bullwhip effect-related ISs, where the role investmentrelated (structural) uncertainty is of great importance. Of course, IS have been evaluated previously by numerous authors, for examples, see Gunasekaran et al. (2001), Renkema and Berghout (1997) and Tam (1992), but to the best of our knowledge very few authors have discussed IS investment evaluation with regards to the bullwhip effect – discussing it is one of the contributions of this work. "
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    ABSTRACT: A simplified three-step methodology for profitability evaluation of an information systems investment into reducing the bullwhip effect in the supply chain is presented. The bullwhip effect is the effect of increasing variability of the demand upstream in the supply chain and it causes especially the upstream companies to suffer. Removing bullwhip is beneficial for the whole supply chain. There are remedies to the bullwhip effect, based on increasing the information flow throughout the supply chain – these remedies often require an information systems investment, the cost of which is hard to estimate exactly. Investment in a bullwhip reducing information system will take place if it is perceived to be profitable. Being able to evaluate the profitability, when information about the reachable benefits and the costs of the project is imprecise requires specialised methods: for this reason, the pay-off method is used for the analysis. The three-step process is illustrated with a numerical example.
    International Journal of Logistics Systems and Management 03/2014; 17(3):340-356. DOI:10.1504/IJLSM.2014.059766 · 0.47 Impact Factor
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    • "" Many scholars are paying attention towards evaluation with the main concern being how to evaluate IS with different approaches, methods, frameworks, models and all knowledge interests such as arguments concerning different ways to evaluate IS, debates concerning traditional versus interpretive ways of evaluation (Hirschheim and Smithson, 1999; Lagsten and Goldkuhl, 2012) as well as evaluations aim to justify different kinds of purposes and generates different kinds of outcomes (Lagsten and Karlsson, 2006). A review of the normative literature by (Gunasekaran et al., 2001; Love et al., 2004) show that IS evaluation projects are usually evaluated using traditional financial evaluation techniques such as costbenefits analysis, return on investment, internal rate of return, and net present value, meanwhile (Irani and Love, 2008) indicate that economic based IS/IT evaluation justifications are calculating based on economic terms of costs and benefits but they do not contain the impact of intangibles and non-financial criteria, which effect on overall project outcomes. Bernroider et al. (2013) supports that organizations focus considerably on tangible benefits and neglect intangible or strategic impacts as well as the other factors associated with employees and stakeholders. "
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    ABSTRACT: Currently, organizations and stakeholders are more concerned with environmental issues, thus the role of information systems (IS) and information technologies (IT) within organizations towards ecological being sustainability has changed. Environmental or Green initiatives is realized as having credibly to assist in shifting to a sustainable society. Furthermore, the elements within IS/IT evaluation including costs, benefits and risks within organizations associated with IS evaluation and sustainability are taken into account in terms of the challenges concerning green practices (Green IS/IT) leading the organizations to attempt to diminish the impact of their IS/IT operations towards the environments socially and ethically, which indirectly assist them in achieving competitive advantages competitors through adopting and implementing environmental sustainability practices. In addition, government sectors are taking a step closer in order to create awareness and incorporate green into all components of the business functions. Practitioners and scholars are motivating to use the existing frameworks and models to evaluate IS/IT initiatives with sustainability taken into perspectives. Consequently, the purpose of this paper is to critically review the normative literature associated with IS evaluation within sustainable environments and to develop a conceptual framework or model for IS evaluation within sustainable organizations that measures the impact of environmental sustainability factors and highlight a number of research gaps that need to be addressed in future research.
    European, Mediterranean & Middle Eastern Conference on Information Systems 2013, Windsor, United Kingdom; 10/2013
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