82 research outputs found
Evaluation of the applicability of investment appraisal techniques for assessing the business value of IS services.
There is a consensus among academics and practitioners that ICT investments should be carefully justified, measured and controlled. This is not different for the development of a service architecture or the development of particular services as such. In practice, the traditional capital investment appraisal techniques (CIAT’s) such as payback period or net present value are by far the most used techniques for assessing the feasibility of ICT investments. Nevertheless, serious doubts about the fitness of these techniques in a service based value net environment arise. Value nets have special characteristics such as high flexibility and agility, re-use of services,… that makes the use of these techniques very difficult and the reliability of the outcome most uncertain. Efforts are made to find more appropriate techniques. In the past, CIAT’s have been adjusted so that these techniques become more reliable in an ICT environment and new justification methods and techniques have been developed. However neither these adjusted techniques nor the new techniques are frequently used. This might be explained by the fact that the outcome of these techniques is difficult to interpret and to use and the fact that some significant problems (like the estimation of hidden costs) remain unsolved. Moreover, most of the new techniques are still in the conceptual phase. In this paper we evaluate these adjusted and new techniques in the light of service oriented architectures. We will argue that non of the techniques offers a good solution for assessing the business value of IS services. Despite the existence of a wealth of literature, the IS community appears to be no nearer to a solution to many problems associated with ICT appraisal. This is potentially problematic when dealing with investments in emerging technology such as IS services or service architectures. Since all techniques presented in the article have their drawbacks, it is safe to say that reliance on a sole technique may lead to sub-optimalisation or even failure. Therefore it makes sense to use a mixture of techniques, eliminating or diminishing the weaknesses of each of the techniques used. We strongly recommend a multi-layer evaluation process, or an evaluation process derived from the balanced scorecard, for the appraisal of investments in services or service architectures.
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Integrating the IS with the enterprise: Key EAI research challenges
Enterprise Application Integration (EAI) technologies provide the means to integrate strategic business solutions within and across the component parts of organisational information system infrastructures. The continuing development of both digitally integrated business models, through various eCommerce and eBusiness initiatives, has meant that the importance of EAI within enterprise IS, has increased significantly. Noting that EAI incurs not only technological but stakeholder-level commitments, this paper outlines the product of a sustained investigation into key challenges within Enterprise IS and EAI, and provides a framework for future research and investigation into this emerging and evolving area
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A revised perspective on the evaluation of IT/IS investments using an evolutionary approach
On-going research into the evaluation of Information Technology (IT) / Information Systems (IS) projects has shown that aerospace and supply chain industries are needing to address the issue of effective project investment in order to gain technological and competitive advantage. The evaluative nature of the justification process requires a mapping of interrelated quantities to be optimised. Earlier work by the authors (Irani and Sharif 1997) has presented a theoretical functional model that describes these relationships in turn. By applying a fuzzy mapping to these variables, the optimisation of intangible relationships in the form of a Genetic Algorithm (GA) is proposed as a method for investment justification. This paper revises and reviews these key concepts and provides a recapitulation of this optimisation problem in terms of long-term strategy options and cost implications.
Glossary of terms : DC = Direct Costs, FA = Financial Appraisal, FR = Financial Risks, FUR = Functional Risks, HC = Human Costs, IC = Indirect Costs, IR = Infrastructural Risks, OB = Operational Benefits, OC = Organisational Costs, PB = Project Benefits, PC = Project Costs, RF = Risk Factor, SB = Strategic Benefits, SM = Strategic medium-term benefit, SR = Systemic Risks, TB = Tangible Benefits, TC = Tangible Costs, TL = project lead time, TR = Technological Risks, V= Project Value
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Theoretical optimisation of IT/IS investments: A research note
The justification of Information Technology (IT) is inherently fuzzy, both in theory and practice. The reason for this is due to the largely intangible dimensions of IT projects. In view of this, this research note presents the results of on-going research, in the application of Fuzzy Cognitive Mapping (FCM), as a tool to identify complex functional interrelationships associated with the justification of IT. This paper presents a theoretical functional model which describes these relationships, and by using an FCM, further interrelationships are developed in the context of justifying IT projects. A procedure which would address the optimisation of these intangible relationships in the form of a Genetic Algorithm (GA) is proposed as a process for Investment Justification
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Factors influencing the identification of it indirect costs: A case study
Organizations expenditure on Information technology (IT) related investments continue to rise in the
face of the fierce competition in the various marketplaces. Nevertheless, the problem of evaluating
such investments remains a challenge to managers due to the inability of the evaluation techniques to
accommodate the indirect costs associated with IT investments. This negatively affects the accuracy of
the justification process and the investment decision. According to literature, indirect cost factors are
not easily identified or quantified because they human and organizational dimensions. Indirect costs,
proven to be problematic to accommodate within traditional appraisal techniques, make IT managers
choose to ignore them and neglect to include them in IT investment budgets. The research suggests an
alternative solution to the problem of quantifying such indirect costs by calling for a more accurate
identification of those costs which would enable a more robust management and finally control of
such costs. Using a case study the paper highlights the investment decision making process in an
international resource company and confirms the call for a more robust identification process. In
addition the paper maps each indirect costs factor to the lifecycle stage(s) in which it occurs and
presents the factors that influence the quality of the identification process
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Knowledge dependencies in fuzzy information systems evaluation
Experience and research within the field of Information Systems Evaluation (ISE), has traditionally centered on providing tools and techniques for investment justification and appraisal, based upon explicit knowledge which encodes financial and other direct situational factors (such as accounting, costing and risk metrics). However, such approaches tend not to include additional causal interdependencies that are based upon tacit knowledge and are inherent within such a decision-making task. The authors show the results of applying a cognitive mapping approach, in the guise of a Fuzzy Cognitive Mapping (FCM) simulation, i.e. Fuzzy Information Systems Evaluation (F-ISE), in order to highlight the usefulness of applying such a technique. The authors highlight those contingent and necessary knowledge dependencies, in an exploratory sense, which relate to the investment appraisal decision-making task, in terms of the interplay between tacit and explicit knowledge, in this regard
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Applying concepts of fuzzy cognitive mapping to model IT/IS investment evaluation factors
The justification process is a major concern for many organisations that are considering the adoption of Information Technology (IT) and Information Systems (IS), and is a barrier to its implementation. As a result, the competitive advantage of many companies is being put at risk because of management's inability to evaluate the holistic implication of adopting new technology, both in terms of on the benefit and cost portfolios. This paper identifies a number of well-known project appraisal techniques used in IT/IS investment justification. Furthermore, the concept of multivalent, or fuzzy logic, is used to demonstrate how inter-relationships can be modeled between key dimensions identified in the proposed conceptual evaluation model. This is highlighted using fuzzy cognitive mapping (FCM) as a technique to model each IT/IS evaluation factor (integrating strategic, tactical, operational and investment considerations). The use of an FCM is then shown to be as a complementary tool which can serve to highlight interdependencies between contributory justification factors
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Integrating information and knowledge for enterprise innovation
It has widely been accepted that enterprise integration, can be a source of socio-technical and cultural problems within organisations wishing to provide a focussed end-to-end business service. This can cause possible “straitjacketing” of business process architectures, thus suppressing responsive business re-engineering and competitive advantage for some companies. Accordingly, the current typology and emergent forms of Enterprise Resource Planning (ERP) and Enterprise Application Integration (EAI) technologies are set in the context of understanding information and knowledge integration philosophies. As such, key influences and trends in emerging IS integration choices, for end-to-end, cost-effective and flexible knowledge integration, are examined. As touch points across and outside organisations proliferate, via work-flow and relationship management-driven value innovation, aspects of knowledge refinement and knowledge integration pose challenges to maximising the potential of innovation and sustainable success, within enterprises. This is in terms of the increasing propensity for data fragmentation and the lack of effective information management, in the light of information overload. Furthermore, the nature of IS mediation which is inherent within decision making and workflow-based business processes, provides the basis for evaluation of the effects of information and knowledge integration. Hence, the authors propose a conceptual, holistic evaluation framework which encompasses these ideas. It is thus argued that such trends, and their implications regarding enterprise IS integration to engender sustainable competitive advantage, require fundamental re-thinking
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IT Transformation Decision Processes: A Conceptual Framework for Efficiency/Effectiveness Optimization
Decision processes are complex managerial challenges for long-term information technology (IT) initiatives with an organization-wide scope (in short: IT transformations). Costs, benefits, and risks of such IT investments are hard to capture, and the dozens ofprescriptive methods proposed for IT project evaluation have proved to contribute little to solve the dilemma in practice. Thus, as opposed to continue the search for another prescriptive evaluation methodology, this paper follows a new approach: it targets the development of a conceptual framework that allows for the improved management of holistic IT decision processes - as opposed to cook-book approaches that attempt optimizing the corresponding decisions. The paper introduces a descriptive conceptual framework capable of describing the key components (e.g. socio-political elements) of practical IT transformation decision processes, while at the same time providing enough structure (e.g. rational decision process structures) to allow for decision process effectiveness/efficiency optimization. The framework is then leveraged to deduce theoretical levers for the improvement of practical decision processes. It is suggested as a basis for future structured/holistic case study research ofpractical IT transformation decision processes. To allow for the latter, the paper introduces an approach for the approximation of the involved input and output parameters in the framework
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