Understanding “IS business value”: derivation of dimensions

Abstract

The ever increasing expenditure on information systems (IS) has been accompanied by an increasing demand to measure the business value of the investment. There has been much debate in the literature over appropriate measures to determine this value. Of the many evaluation methods that have been proposed by researchers, only the various forms of cost‐benefit analysis have gained wide acceptance among practitioners. However, before appropriate measures can be devised, a clear definition of what is to be measured and an understanding of the dimensions of “IS business value” are necessary. The aims of this research paper, therefore, are first to highlight the complexity of the “IS business value” picture and second to bring some clarity to the complex problem of determination of “IS business value”. These aims are addressed by first defining the construct of interest and, second, by deriving its dimensions. It is posited that an “IS business value” evaluation methodology should include measures for each of these dimensions in order to tap all the aspects of value contribution.