Not just about the method

25 Oct

From my research into frameworks for evaluating Information systems investments such as the Delphi/VAHP/DEA model which I discussed in my previous blog and also from reading about the PENG model which sully1210 discussed, I agree that the evaluation methods are heavily dependent on personnel’s attitudes and those peoples resistance to change.

To place a monetary value on an intangible asset is subject to these personnel/line managers in an organization who place an estimated value on each intangible asset e.g. morale.  As Oliver 2007 pointed out by including intangible benefits of the project in the evaluation, a better understanding of the true value of the project will emerge. So to get a good evaluation we need people to place a high value on the intangible benefits associated with investment in information systems.

So therefore it is not just the method used to evaluate the investment but key organisational drivers that also affect the outcome of the IS/IT project evaluation. (See above figure)

The figure above which I got from Zahir Irani and Peter Love (2008) shows the eight characteristics of effective IT evaluation which include the six key organisational drivers. Irani and Love (2008) conducted interviews with 72 senior managers in 36 companies, “effective evaluation outcomes such as selection of the right projects, consistent and timely decision-making, corporate learning, and thus, improved IT/IS project outcomes, were found to be closely related to the six key drivers presented” above. which are :

1)      Accountability for results

2)      Top-leadership commitment

3)      Strong IT- business relationship

4)      Alignment to Strategy

5)      Effective Measurement regime

6)      Willingness to take action

Irani and Love (2008) findings show that effective evaluation outcomes are more closely related to evaluation behaviours in organisations than the use of specific methods and techniques. Simplicity and flexibility were also found to be key drivers for effective IT /IS evaluation practice.

Another interesting finding here was that companies who had the most successful practices came from the finance and insurance sector while the mining sector was found to have the least effective practices. Due to the mining sector considering IT as ‘a commodity’, “this resulted in greater challenges in terms of obtaining access and information from the business and had a serious negative impact on the effectiveness of IT project evaluation.”

Do people agree that it is not just the method used to assess the investment but there are also key organizational drivers which can determine the successful evaluation of an information system investment?

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One Response to “Not just about the method”

  1. thestrategicblogger November 3, 2012 at 5:18 pm #

    Interesting insight 1rguru, I certsainly agree with your assesssment that orgaizational drivers (if not cultures) are at play. The use of the word “commodity” is also relevant and suggests that the less vital you view your i.t. investment the less successful it will be a la the mining industry.

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