Evaluating IT investments: an organizational perspective

This study focuses on the way in which organisations evaluate their investments in information technology (IT). The objective is to bridge the gap betwen the mainly theoretical work done on evaluation and the experiences and needs of organisations. A comprehensive benefits and measurement framework is described. The five types of benefit cover all benefits that are likely to result from an IT investment and a set of measures, based on the literature and the experience of organisations, is proposed. If the same measures are also used to review the project after implementation and monitored regularly as part of a benefits management programme, they provide feedback to the business managers to ensure that the expected benefits are achieved. Taking this proactive step increases the likelihood of investments in IT resulting in enhanced business performance. This study has also revealed that organisationaI context influences evaluation policy and practices. Differences in attitudes towards effectiveness, evaluation and measurement can be explained by the industry sector, the culture and the management approach of the organisation. A complete model of the evaluation process demonstrates the complex nature of the evaluation of IT investments in organisations.