Does ROI Matter? Insights into the True Business Value of IT

Authors

  • A J G Silvius

Keywords:

IT business value, return on investment, real option valuation, balanced scorecard

Abstract

Ever since the introduction of an 'IT productivity paradox' by Robert Solow, the business value of information technology (IT) has been the topic of many debates by practitioners as well as by academics. In these discussions a distinction can be made between the variance approach, investigating what the relationship between IT investments and organisational performance is, and the process approach, investigating on how this relationship works. Following the process approach, this paper describes a useful framework for assessing the organisational impact of IT. Secondly the paper considers the relation between IT impact and organisational performance and reviews the IT investment evaluation methods. The paper concludes with a proposal for a multivariable value assessment sheet, based on insights derived from the balanced scorecard theory.

Downloads

Published

1 Nov 2006

Issue

Vol. 9 No. 2 (2006)

Section

Articles

License

Open Access Publishing

The Electronic Journal of Information Systems Evaluation operates an Open Access Policy. This means that users can read, download, copy, distribute, print, search, or link to the full texts of articles, crawl them for indexing, pass them as data to software, or use them for any other lawful purpose, without financial, legal, or technical barriers other than those inseparable from gaining access to the internet itself. The only constraint on reproduction and distribution, and the only role for copyright in this domain, is that authors control  the integrity of their work, which should be properly acknowledged and cited.

Creative Commons License

This Journal is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.