An investment framework for information technology projects in medium sized organisations
As computers absorb an ever-increasing proportion of corporate resources, and spread into every sphere of business activity, the issue of achieving benefits from investments in information technology (IT) is assuming major importance. Research evidence to hand suggests that IT investments are failing by orders of magnitude to provide appropriate levels of payback. A major part of the difficulty lies in the fact that management appears to lack a framework or even a language for addressing the issues, and are bewildered by the speed and impact of the changes that are taking place. This is particularly apparent in smaller and medium-sized organisations. This thesis examines the causes of the problem, and suggests that it stems mainly from an undue emphasis being placed by management on finance-based techniques, a legacy from an earlier and much different environment. It seeks to establish that such techniques are not only inadequate, but potentially counter-productive. Using established research methodologies, a framework is developed which seeks to address the key issues involved in achieving business benefits from IT, yet which is understandable to, and applicable by, managers in medium-sized organisations. Uniquely among IT investment frameworks, the concept of business reengineering or business process redesign is introduced as a formal evaluation criterion, reflecting the degree of business transformation currently being experienced, and the central role of IT in that transformation. The framework is then validated and refined through being applied in actual investment decision making processes undertaken by five organisations covering a range of business arenas.