An investigation of the process of IS/IT investment evaluation and benefits realisation in large Australian organisations

Abstract

In modern organisations a large portion of senior management's time is now being consumed in finding ways to measure the contribution of their organisations' IS/IT investments on business performance. It has been shown that IS/IT investments in many organisations are huge and increasing rapidly every year and yet there is still a lack of understanding of the impact of the proper IS/IT investment evaluation processes and practices in these organisations. At the same time, the issue of expected and actual benefits realised from IS/IT investments has generated a significant amount of debate in the IS/IT literature amongst the researchers and practitioners. This is as true in Australia as it is in the rest of the developed world. Thus, one can argue that a detailed study of current practice in IS/IT investment evaluation in Australia is warranted. In this research study, an attempt was made to: (1) establish current Australian industry and government practices and norms in managing IS/IT benefits and evaluation; and (2) develop a framework based on the fit between theory and practice of IS/IT investment evaluation by large Australian organisations, particularly in an environment where much of the IS/IT is outsourced. Research objective one utilised an existing questionnaire based on Ward et al. (1996). This questionnaire was sent to the IS/IT managers of the largest 500 Australian organisations. The aim of this objective was to investigate IS/IT investment evaluation and benefits management and realisation in these Australian organisations, so as to shed light on the current practices and norms in this area.The second research objective employed two case studies utilising semi-structured interviews, observation and document review. The aim of this objective was to develop a framework based on the fit between theory and practice of IS/IT investment evaluation by large Australian organisations. Results from the survey and two case studies were analysed and a framework for benefits realisation and investment evaluation was developed. The major contribution of this research include first, the creation of several useful guidelines for large outsourcing organisations undertaking IS/IT investment evaluation and benefits realisation processes and second, the development of a benefits realisation and investment evaluation framework which offers a practical tool to help the large organisations to determine when and how the IS/IT investment evaluation and benefits realisation should be adopted.