Thirst for business value of information technology

For years information technology (IT) has helped companies improve organizational efficiency and effectiveness. Today’s IT plays a more strategic role in building capabilities for sustaining and creating competitive advantages. The increasing importance of IT has led many organizations to integrate it into their daily operations. To justify the ever-increasing spending on IT, organizations have been searching for evaluation methods to prove the business value of IT. However, this is a challenging undertaking, as there are contradictory answers to questions on whether it is worthwhile to pay substantial sums for IT. To gain insight into the reasons behind the contradictory answers, this paper first reviews conflicting research results of past studies on IT business value. It then explains the term IT productivity paradox. Last, it provides five reasons why IT business value is not fully reflected in the way business managers expect it to be

Information systems for organizational effectiveness model: a rationale alignment

Despite the proposal of various Information Systems (IS) evaluation models and approaches, IS evaluation has never been straightforward. There are issues and challenges in proving the business value of IS. Adding to the difficulty, a vast number of measures have been employed conveniently for evaluation purposes without going through a rigorous validation process. Recognising the complexity for IS researchers, IS specialists, and business managers to agree on a common model for the evaluation of IS business value, this chapter presents an empirically validated IS evaluation model, the IS for organisational effectiveness (ISOE) model, for planning, designing, implementing, and appraising IS. There also emerges a new theory, the Information System business value (ISBV) theory, from the ISOE model to establish that IS business value is multifaceted and are observable in the form of improvements in organisational effectiveness