Evaluation of Information System Investments: A Value Dials approach to closing the theory-practice gap

Abstract

Failed or partially failed information systems (IS) investments continue to be a problem in both public and private sectors. Although there are many causes of such failure, lack of clarity about the goals and benefits expected and how they are to be realized is one of the major contributors. This is particularly so in the public sector where the purpose of IS investment is not to increase profits, but to accomplish social and political goals. One way of reducing failure and wastage rates is to have ex-ante evaluation. Over the past three decades IS research has proposed a plethora of new theoretical approaches to improving ex-ante evaluation, but with a few exceptions, these have had little impact on practice. This paper presents a way to address this gap between theory and practice. It proposes a way in which managers can improve IS investment evaluation by changing perspective from a focus on traditional analytic tools towards a design attitude that seeks to develop multi-criteria IS evaluation approach based on contextual experience and prior knowledge. The proposed approach enables organizations to design and develop a value case using value dials as a common language that defines what constitutes the value of particular IS investments for a specific context. To assess its effectiveness, this approach was applied using a multilevel dialogical action research project within a Swedish public organization. The findings show that managers in this organization significantly improved the effectiveness of their evaluation of IS investments.