|
This paper makes the case for adopting a risk measure from the finance sector for IS/IT project and portfolio evaluation. The proposed value-at-risk approach constitutes a well-tested approach in high-risk environments, especially banking, and reports the expected maximum loss (or worst loss) over a target horizon within a given confidence interval. Value-at-risk is computed using either an analytical, parametric approach, or resorting to simulation, either based on historical samples or Monte Carlo methods. The main advantages of using value-at-risk measures are that they are methodologically consistent with modern IS/IT evaluation approaches like real options, that they offer possibilities for management and assessment of IS/IT project portfolios, and that the results are easy to interpret.
Keywords:
e-Commerce, IT investments, SMEs, IT costs, IT investment appraisal, Greece
Download FULL PAPER
Back to Contents |
