Evaluating Information Technology investments: research findings and reappraisal

Abstract. Investments in Information Technology are large and rising, but frequently the subject of disappointed expectations. Some explanations can be found in how they are evaluated and controlled. The paper reports findings from case study work and a 50 organization research project carried out in 1990‐91. It first highlights 10 common problem areas that can be addressed. It then focuses on evaluation at the critical feasibility stage of projects and identifies from the research a number of ways in which evaluation practice can be improved. It finds a fall‐off in evaluation at subsequent project stages, little attempt to link evaluation across the lifetime of systems, and a fragmented approach to learning from the evaluation experience for future investments. A number of modern alternatives to traditional financially based investment appraisal techniques that dominate the sample are then critically assessed. Tailored to specific organizational circumstances and projects these offer ways forward. Broader thinking, in terms of Information Systems (IS) investments, and a deeper understanding of IS as human activity systems lead on to multiple effectiveness criteria and related measures. However, major improvements may lie in allying more appropriate techniques and measures to developing evaluation as an organizational and social process, with the deeper organizational learning about IT this would entail.