A strategy-based method of assessing information technology investments

Abstract

Purpose – The purpose of the paper is to present a theoretical framework and the preliminary results of a research on how to assess information technology (IT) investments so as to deliver maximum business value. Design/methodology/approach – To see whether IT projects fit strategy, the Strategy Map provides a framework for defining the portfolio value and data envelopment analysis (DEA) is used to measure the efficiency of project portfolios. Subsequently, an application that illustrates the value of the framework is described. Findings – The authors offer a framework that integrates the Strategy Map and IT project portfolio management (PPM) and suggest that this conceptual framework will allow an organization to enhance the value of IT investments. Research limitations/implications – This paper is supported by a case study using secondary data only. Practical implications – The suggested method could help CEOs to understand the interactions between projects and strategy and thus supports decision making to prioritize and track IT investments. The paper illustrates how the proposed framework is applied. It also provides the basis for further research. Originality/value – By explicitly linking IT investment with organizational goals, this approach produces results that differ from those of previous studies and provides a strategy-based approach to PPM.