Information Technology: When is it Worth the Investment?

Abstract

As companies attempt to streamline work processes and reduce costs, analyzing the role of information technology continues to be essential in such efforts. CEOs are now more skeptical regarding the contribution of information technology to the overall financial performance of the company. They doubt that IT direction is meaningfully linked to business goals. Therefore, before the person performing the role of CIO prepares a recommendation for investment in IT technology/systems it is critical to support their case with hard data showing clearly the expected return on the investment. Even though more data is available to assist CIO’s in making IT decisions, most CIOs continue to experience difficulty in demonstrating the value of IT investments. This paper examines the research over the last 10 years on IS/IT investment value in an effort to highlight issues that should be considered before investing in information technology.

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