Towards understanding dissatisfaction with explanations of IT value

Abstract

The research focused on dissatisfaction with explanations of Information Technology (IT) value. IT’s business potential and the high levels of IT investment have put IT under the management spotlight. Management typically asks: “What is the contribution of our IT investments to improving our corporate strategy and business leverage?” or “How can we monitor the progress and performance of investments, in order to identify improvement actions?” Managers are, however, dissatisfied with explanations of IT value, because attempts to demonstrate the link between IT investments and business performance have produced mixed results. The research objective required the development of a framework as a step towards understanding dissatisfaction with IT value. Three case studies were used that resulted in a concluding theory consisting of a framework, a set of hypotheses describing the relationships between the elements of the framework and a pattern of conditions under which there is dissatisfaction with explanations of IT value. The theory clarifies dissatisfaction with explanations of IT value: IT is on management’s agenda due to its track record; high spending on IT; the need to exploit IT and dissatisfaction with available explanations of IT value. An outcome of this is a concern about IT’s value. Management’s concern is conditioned by factors such as their levels of comfort with IT; the business/IT relationship and management’s mindset about IT as a business resource. The concern becomes a need to control IT which requires an effective IT evaluation process in turn. Steps to ensure an effective IT evaluation process need to address the availability of alternative IT evaluation methods; the mindset about IT evaluation; flaws in IT evaluation methods; problems with defining IT value as well as IT benefits and costs complications. As a result, explanations of IT value may not be satisfactory. IT will then remain on the management agenda and management will continue to be concerned about IT value. The theory indicates two broad strategies to overcome or avoid dissatisfaction with explanations of IT value. The first strategy is to fully understand the reasons for management’s concern about IT value as well as to recognize those conditions that could influence concerns about the value of IT. The second strategy is to ensure an effective IT evaluation process by specifically addressing those factors or conditions that could impact on the effectiveness of the IT evaluation process.