The Electronic Journal of Information Systems Evaluation provides critical perspectives on topics relevant to Information Systems Evaluation, with an emphasis on the organisational and management implications
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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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Journal Article

Survey on Available Methods to Evaluate IT Investment  pp71-82

Pornthep Chaysin, Jirapun Daengdej, Nopphon Tangjitprom

© Mar 2016 Volume 19 Issue 1, Editor: Shaun Pather, pp1 - 82

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Abstract

Abstract: Making decisions for Information Technology (IT) investments have become a critical decision in businesses today. IT investments are being seen as a strategic investment for many organizations. However, organizations are also concerned about h ow IT investment can be translated into dollar returns. In response, earlier literatures had attempted to propose evaluation methods and measurements to justify such investments. Unfortunately, none of these proposed solutions were considered appropriate for IT investment, hence to date, there are still no formal evaluation methods on the measurement of such investments. In view of this, this paper attempts to perform a survey across different evaluation solutions to justify IT investment and seek to furt her understand the different reasons that may prevent the IT industry from defining a standard evaluation method.

 

Keywords: Keyword: IT Investment, Evaluation Method, Return on Investment, ROI, Net Present Value, NPV, Payback, PBK, Internal Rate of Return, IRR

 

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Journal Article

Impact of IS/IT Investments on Firm Performance: Does Stakeholder Orientation Matter?  pp99-111

António Guerreiro

© May 2016 Volume 19 Issue 2, ECIME 2015, Editor: Elias Pimenidis, pp83 - 134

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Abstract

Abstract: This research project addresses a central question in the IS business value field: Does IS/IT investments impact positively on firm financial performance? IS/IT investments are seen as having an enormous potential impact on the competitive posit ion of the firm, on its performance, and demand an active and motivated participation of several stakeholder groups. Actual research conducted in the Information Systems field, relating IS/IT investments with firm performance use transactions costs econom ics and resource‑based view of the firm to try to explain and understand that relationship. However, it lacks to stress the importance of stakeholder management, as a moderator variable in that relationship. Stakeholder theory sees the firm as the hub cen tric to the spokes representing various stakeholders who were in essence equidistant to the firm, and survival and continuing profitability of the corporation depend upon its ability to fulfil its economic and social purpose, which is to create and distri bute wealth or value sufficient to ensure that each primary stakeholder group continues as part of the corporation⠒s stakeholder system. Stakeholder theory in its instrumental version, argues that if a firm pays attention to the stakes of all stakeholde r groups (and not just shareholders), it will obtain higher levels of financial performance. With this premise in mind, the aim of this paper is to discuss and test the use of stakeholder theory in the IS business value stream of research, in order to a chieve a better understanding of the impact of IS/IT investments on firm performance (moderated by stakeholder management). To achieve the expected impact from an IS/IT investment, it is argued that firms need a strong commitment from those stakeholder groups, which lead us to the need of a corporate ⠜stakeholder orientation⠀. When firm financial performance is measured by returns on assets (ROA), returns on investments (ROI) and returns on sales (ROS), the results show that ⠜stakeholder ori entation⠀ impact positively in the relation between

 

Keywords: Keywords: IS/IT investments, impacts, financial performance, stakeholder orientation, return on investments, IS business value

 

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