When should the value of an IS investment be measured quantitatively or qualitatively?

17 Nov

There are a number of different factors that affect how the value of an IS investment should be measured and as irguru previously outlined, there is no one size fits all model. ((https://sopinion8ed.wordpress.com/2012/11/14/a-one-size-fits-all-approach-does-not-exist/#comments )

The need for the use of both quantitative and qualitative measures is still clear. This blog post will outline when qualitative and quantitative measures should be used in IS evaluation.

According to Kaplan and Maxwell (1994) there are five main cases when qualitative methods should be used.

  • For understanding how the systems users perceive and evaluate that system.
  • For understanding the social and organisational influences on a systems use.
  • For investigating the causal processes of a system.
  • For evaluation that is aimed at a programme currently under development rather than assessing an existing one.
  • For increasing the utilization of evaluation results.

(Kaplan and Maxwell, 1994).

Examples of qualitative methods for evaluating an IS investment include observation, open ended interviews and survey’s. The main strengths associated with using qualitative methods for evaluating an IS investment are that they relate to the context in which the system is being used and its development, the ways that the users of the systems view it and the processes concerned with how a certain system is accepted, rejected or adapted in particular settings. They may also take into account the intangible benefits of an IS investment. (Kaplan and Maxwell, 1994).

According to Kirui and Otike ( there are also many benefits to using quantitative methods for evaluating an information system investment.

  • For planning, where plans prepared without relevant data cannot achieve better results.
  • For measuring performance, where evaluation based on statistics clearly shows the difference between achieved results and expected results.
  • For backing up statements of opinion on investments and providing a degree of scientific value.
  • For improving the quality of decisions

(Kirui and Otike)

Examples of quantitative methods of evaluating an information system investment include Net Present Value, Return on Investment, Internal Rate of Return (investopedia.com) and Randomized Control Trial (in medicine) (Stoop and Berg, 2003).

It is clear that many organisations will ultimately favour quantitative methods for evaluation over qualitative ones, and they have been the evaluation method of choice for many years. They are seen as ‘the gold standard’ and are often valued higher that qualitative methods. (Stoop and Berg, 2003).

Ideally a combination of both qualitative and quantitative methods should be used in the evaluation of an IS investment. This is very similar to what irguru was saying in his previous blog post, as not one method of evaluation will suit every organisation. What do other think?

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3 Responses to “When should the value of an IS investment be measured quantitatively or qualitatively?”

  1. blackbird333 November 23, 2012 at 12:41 pm #

    This is a very interesting blog sully1210. I liked the way you explained when qualitative and quantitative measures should be used in IS evaluation. You also provided examples. As you already declared a combination of both qualitative and quantitative methods should be used in the evaluation of an IS investment. Why are organisations in favour of quantitative methods for evaluation over qualitative ones, as you have stated above?

    • sully1210 November 25, 2012 at 8:27 pm #

      Thank you for your interest in my blog post blackbird333.

      To summarize, the main reason companies favour quantitative methods of evaluation is because they offer hard facts and figures about particular investments. Qualitative methods on the other hand are more open to interpretation and are often more opinion based. When looking to make an investment. In the past companies have been more likely to base their opinions on favourable figures, particularly in times of economic crisis. However more and more today, they are realising the importance of qualitative measures, and the role of gut instinct (which has been outlined in numerous blogs) is becomming of increasing importance.

      • blackbird333 November 26, 2012 at 5:28 pm #

        Thank you for your reply sully1210. It is interesting to note how businesses are evolving and are realising the importance of qualitative measures and the role of gut instinct.

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