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The Need for a Better Approach
 The
methods for analyzing the value of IT
investments have not nearly kept up with
the advances in IT itself. Making
“economically rational” decisions about
information technology (IT) investments
is becoming both more important and more
difficult. While there is no shortage of
options for IT investments, numerous
"intangibles" and increasing uncertainty
about benefits and costs complicate
efforts to evaluation them.
This is a critical issue because the
difference between the “right” decision
and the “wrong” decision is dramatic for
many IT investments. Yet most current
methods are based on traditional
accounting procedures, which ignore some
of the most significant benefits and
critical risks. Other methods attempt
"soft" analysis techniques that fail to
quantify the investment at all and leave
the same questions unanswered.
If you are an executive in a position to
make decisions about how your
organization invests in information
technology (IT), you probably have asked
yourself many of the following
questions:
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How can I compute a return on IT if most
of the benefits seem "intangible"?
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I know IT is risky because I’ve seen
cost overruns, unrealized benefits or
even cancellations. How do I measure and
manage risk in IT?
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How do I calculate the value of more,
better, or faster information?
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Since IT changes so fast, how do I know
I should make an investment now or wait
for the next big change in technology?
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Is there any alternative to our
subjective and politically driven IT
decision process?
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