Value Delivery of Information Technology Investment: A Conceptual Framework

Abstract

Organizations, be it private or public, are making huge spending on information technology (IT). These spending, whether for productivity or strategic reasons, become the fundamentals and tools on how evaluate their IT investment. Evaluating every investment, before and after being made, is very crucial for in determining successful decision that has or will be set. Especially when decision to invest is onset, the expectation of values or benefits from the investment become substantial to arrive at such decision to invest. This study reviews and analyzes eight pertinent studies that model IT investment values and benefits and propose a model to describe the value delivery of an IT investment evaluation. Based on two-staged filtration method, 110 variables are narrowed and converge into 23 variables which categorized into five factors. In this paper, the five factors of IT investments value delivery are discussed which are financial, operational, organizational, strategic, and service. in IT are reflected in the organizations strategic planning for competitiveness and survival. Strategically, implementation of IT is wisely made to align with business processes, therefore to increase firm performance (8). These reasons, whether productivity or strategic gains, become the fundamentals and tools on how evaluate their IT investment. Reasons are translated into justification which formulated into IT investment evaluations. Evaluating every investment, before and after being made, is very crucial for in determining successful decision that has or will be set. When worth of investment is identified, values or returns from the investment will be established. This paper seeks to identify the values that IT investment delivers to the organization. IT investment values delivery based on a conceptual model is developed. The discussion of the elements was based on the common ground shared among several IT evaluation models from the literature. The review has resulted in a proposed value delivery model.