Measuring the business value of IS investments: a pilot survey of industry attitudes and practices

Information technology (IT) has been in use in organisations for many years but there is a growing concern that the massive investments made in this area have failed to produce the expected economic benefits. Traditionally, cost benefit analysis has been used to aid the decision making process when a new IT project is proposed, but there are strong arguments that indicate that this well-accepted approach is inappropriate for the evaluation of IT investments. Although much theoretical work has been done on alternative approaches, there is no documented evidence of the techniques currently being applied in industry. A small survey, which was conducted to obtain a preliminary view of the attitudes of some organisations to the evaluation of IT and to identify the techniques that were used, is described. The survey indicated that the measurement of the business value of IT investments was of concern to organisations, particularly those where IT played a strategic role and organisations were generally concerned about the current approaches to the measurement of the intangible benefits of projects. However, a high degree of satisfaction was expressed with approaches that linked the measurement of intangible benefits directly to the corporate strategic goals.