Corporate investment in Information Systems (IS) is growing at an ever increasing rate and is being touted as a solution to business issues and as a source of prosperity. Growth in IS and the opportunity this offers has increased the number and range of ideas for new IS investments to be presented to organisations. With such a vast array of options available, organisations are looking for better ways to justify these investments and one way in which this has been done is to employ evaluation methods which have traditionally been used to appraise capital financial investments. However, there are drawbacks of doing so. This study aims to explore the merits and deficiencies in applying evaluation methods from the accounting, finance and economics disciplines to IS investments. A deeper look in to the structure and intended use of each method will be coupled with a review of empirical studies in the area to shed some light on these methods in practice.
Nagm, Fouad and Kautz, Karlheinz, "It Doesn’t Add Up: Why Financial Evaluation Methods are Inadequate in Appraising IS Investments" (2007). ACIS 2007 Proceedings. Paper 7.