What Is the Value of Investment in Information Systems?

Managers frequently ask, “What is the value of our investment in information systems?” This Question must be answered if business decisions regarding expenditures for information systems are to be made rationally. This article presents a method for developing an answer. Although The Question appears to be simple, the answer is complex. In order to reduce the complexity of the answer, The Question is divided into two parts: “Did I get what I paid for?” and “Was it worth it?” The answers to these questions can be provided through the easy-to-understand management reports defined in this article. The primary issue, in the process recommended in this article, is placing dollar amounts on intangible benefits. Although recognized as “a perilous venture, ” the author believes that some evaluation process must be used if the primary question of value is ever to be answered adequately. This article discusses and describes evaluation techniques for intangible benefits. The application of the methods and techniques provided in this article can lead to a clearer understanding of the information system investment. This understanding will lead to greater effectiveness in information systems decisions.