Exploring IT benefits evaluation effectiveness at ex-ante project justification stage

Abstract

The business benefits of IT projects are becoming the main determining factor in selecting projects at the ex-ante justification stage. The core stakeholders, i.e. the business management and IT professionals are charged with the task of evaluating the benefits of IT investment. Despite high adoption rates of formal IT investment appraisal methods, there is still on-going evidence that show organisations not being able to appropriately evaluate IT benefits. This study investigates the process of IT project evaluation at the ex-ante justification stage to understand factors that contribute to ineffective practical application of evaluation and based on the findings, to explore how these factors can be redeemed to improve the benefit evaluation process. A case study research was conducted to explore how benefits can be evaluated appropriately within its context in a tertiary educational institution. The case study research approach enabled the researcher to gain a complete and in-depth understanding of the process and activities involved to identify and measure benefits at the justification stage. Business middle managers that are involved and responsible for IT project justification were approached from various business units as case study participants. Interview questions addressed various aspects of the benefits evaluation process in reference to participants’ experience and past IT project justifications. Content analysis was used to identify frequencies and intensities with which themes and concepts appear in interviewee responses. In addition, a cause and effect relationship tool was used to summarize the research findings for better data analysis and interpretation. The findings indicate factors that contributed to ineffective benefit evaluation in the organization. Close collaboration and partnership between business management and IT professionals is shown to be a crucial component of the justification process. The suggested role of IT management exceeds beyond the task of technical advisor and involves the task of being a coach, informer, educator, assessor, transparency and communication agent. The results also show how best the measurement process can be performed at this stage. This study confirms that business management’s clear understanding of IT benefit concepts is necessary in the evaluation process. Based on the findings, an IT benefit evaluation method is developed as a modification of the current justification process in the organisation. The results presented in this study lay plausible insights for additional approaches to IT benefit evaluation research. It compels researchers to consider new methodologies in the quest for improving benefit evaluation.