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Understanding the Value of Information Technology Enabled
Responsiveness
Ram L. Kumar, Information&Operations
Management, The Belk College of Business Administration, The University of
North Carolina at Charlotte, Charlotte, NC 28269, Email:
rlkumar@email.uncc.edu |
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ABSTRACT |
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Traditional financial
evaluation methods often do not accurately capture the benefits resulting
from investments in information technology (IT). Several intangible
benefits such as improved customer service and increased responsiveness
result from IT investments. This paper describes a model for better
understanding and possibly quantifying the value of improved
responsiveness or flexibility resulting from IT investments. This model is
based on real options theory in finance. The use of this model in the
context of IT investments is illustrated.
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