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The big-bang-for-your-buck theory.
The Journal of Business Strategy
|June 7, 1993
Summary
Properly investing in information technology (IT) yields strategic benefits, while poor implementation leads to significant financial losses. This guide offers a framework for evaluating IT investments and measuring their outcomes.
Area of Science:
- Information Technology
- Business Strategy
- Performance Measurement
Background:
- Information technology (IT) investments are crucial for organizational success.
- Evaluating the strategic impact of IT is complex and often overlooked.
- Poorly managed IT projects can result in substantial financial and operational setbacks.
Purpose of the Study:
- To provide a comprehensive guide for evaluating information technology investments.
- To outline methods for measuring the impact and ROI of IT initiatives.
- To help organizations maximize strategic payoffs from their IT expenditures.
Main Methods:
- Review of best practices in IT investment evaluation.
- Framework development for assessing IT project success factors.
- Analysis of key performance indicators (KPIs) for IT impact measurement.
Main Results:
- Successful IT investments align with strategic business objectives.
- Effective IT evaluation requires both financial and non-financial metrics.
- Clear measurement frameworks demonstrate tangible IT value and ROI.
Conclusions:
- Strategic alignment and robust evaluation are key to successful IT investments.
- Measuring IT impact ensures accountability and drives continuous improvement.
- Organizations can achieve significant competitive advantages through well-managed IT.