Realizing the Business Value of Information Technology Investments: An Organizational Process

Authors

Rajiv Kohli, College of William & MaryFollow
Sarv Devaraj, University of Notre DameFollow

Abstract

A primary reason businesses fail to realize intended payoffs from their information technology (IT) investments is their lack of an effective process for planning, implementing, evaluating, and institutionalizing the payoffs. We present a framework to conceive and implement an IT investment¡¯s payoffs, ensure creation of the appropriate assets needed to achieve the payoffs, and measure the actual outcomes. The four phases in the AIAC framework are Alignment, Involvement, Analysis, and Communication. In examining the business value of IT through this framework, we present three central themes in this paper: 1. IT payoffs are the responsibility of the entire organization, not just the IT department. 2. Management of IT payoffs begins prior to the investment and continues through post-implementation. 3. IT payoffs are contingent upon creating and exploiting complementary assets. We illustrate an organizational process for managing IT investments and measuring the business value of those investments by drawing on the experiences of Holy Cross Health System, a multi-entity healthcare organization that invested in a corporate-wide cost information system (CIS) and established a mechanism to extract business value from that investment.

Recommended Citation

Kohli, Rajiv and Devaraj, Sarv (2008) "Realizing the Business Value of Information Technology Investments: An Organizational Process," MIS Quarterly Executive: Vol. 3: Iss. 1, Article 6.
Available at: https://aisel.aisnet.org/misqe/vol3/iss1/6