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Journal Article

Does ROI Matter? Insights into the True Business Value of IT  pp93-104

A J G Silvius

© Nov 2006 Volume 9 Issue 2, Editor: Dan Remenyi, pp45 - 104

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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.

 

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

 

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