Computer Decision Support for Capital Budgeting: Some Empirical Findings of Practice

Authors

Simon Ho, The Chinese University of Hong Kong, Shatin, Hong Kong
Richard Pike, The University of Bradford Management Centre, Bradford, UK

Document Type

Research Article

Abstract

While recent surveys suggest that capital budgeting systems in business organizations continue to become more formalized and sophisticated, a constraint on the use of sophisticated capital budgeting techniques seems to be the degree of support provided by firms’ capital budgeting information systems (CABIS). This paper, based on a survey of 146 large firms, outlines the current status of CABIS and their usage pattern. It was found that although two-thirds of sample firms have specific computer application systems for capital budgeting, most CABIS are relatively unsophisticated and less than adequate in providing the information and decision support capabilities required to use sophisticated capital budgeting techniques effectively. In particular, the barrier and problems encountered in the use of probabilistic risk analysis were explored. Implications of these findings are discussed.

DOI

10.1177/026839629601100203

Recommended Citation

Ho, Simon and Pike, Richard (1996) "Computer Decision Support for Capital Budgeting: Some Empirical Findings of Practice," Journal of Information Technology: Vol. 11: Iss. 2, Article 3.
DOI: 10.1177/026839629601100203
Available at: https://aisel.aisnet.org/jit/vol11/iss2/3