About the Book
A systematic, step-by-step methodology for assessing the value of technology investments and establishing a mechanism for an ongoing evaluation.Yesterday, IT budgets were approved on faith. Today, they're subject to relentless questioning--and in many cases, they are being slashed indiscriminately. But neither approach is achieving the most important goal: maximizing business value. The IT Payoff gives IT and financial decision-makers what they desperately need: a systematic approach to measuring the true impact of IT spending, and making rational technology investment decisions. This book's methodology addresses today's most critical issues in technology investment, including: identifying where technology can add the greatest value; timing the adoption of new technologies; and coordinating process change with technological change. The authors present a detailed case study, showing how a top healthcare provider used this book's methodology to transform their approaches to technology investment.
The IT Payoff concludes by outlining a complete action plan for the technology decision-maker: one that encompasses operational, strategic, and management issues, addresses partnerships throughout and beyond the organization, and can gain the full commitment of top management. * A breakthrough, start-to-finish roadmap for technology investment decision-makingNew, step-by-step techniques for quantifying the real value of information technology* Bringing "balanced scorecards" to the technology arenaCapturing impacts that conventional approaches miss: process impacts, organizational impacts, and strategic impacts* Technology "S-curves": Sweet spots in the technology lifecycleDetermining when a technology is most ripe for exploitation-and when to move on to the next* Evaluating the "conventional" approaches to technology cost-justificationWhat works when: cost-benefit analysis, breakeven analysis, NPV, economic models, statistical models, and common sense models?*
Coordinating process change with technology investmentMaking sure new technology and new processes work in tandem* Strategic IT: Applying technology where it will deliver the greatest business valueIdentifying the projects most likely to enhance organizational effectiveness* The unique challenges of e-business investment Technology evaluation for today's new Web-centered environments*Identifying your best opportunities to add value through technology*Avoiding key pitfalls that lead to insignificant or negative ROI*Deciding when to implement leading-edge technology-and when to jump off the technology curve*Detailed case studies from healthcare and manufacturing*New metrics, detailed templates, and concrete action plans*Organizational issues that is valuable for financial professionals, IT decision-makers, line-of-business managers, and software clients Today, nearly half of all capital investment is information technology related--and yet, decision makers still find themselves asking the most fundamental questions: Does technology really add value? If so, when? Where should one look for it? What's the best way to quantify technology ROI--and maximize it?
If you're asking these questions, The IT Payoff gives you powerful new tools for answering them. Sarv Devaraj and Rajiv Kohli begin with a historical perspective on technology investment, reviewing the strategic role of technology, analyzing the key risk factors in technology investment, and helping you assess the limitations of your organization's current approach to decision-making. Next, the authors introduce a powerful new methodology for making funding decisions, show how their approach has been applied successfully, and demonstrate exactly how to apply it in your own business. The IT Payoff provides specific templates, metrics, and other resources you can begin using with your very next project--tools that rationalize and optimize IT purchasing decisions, once and for all.
Table of Contents:
Foreword.
1. Introduction to Information Technology Payoff.
IT Payoff: A Dialog. Reasons for IT Payoff Measurement. How Has Investment in IT Been Measured Thus Far? IT Payoff: A Case for Continued Investment?
2. The IT Payoff Paradox.
Factors Contributing to the IT Productivity Paradox. Does the Paradox Still Exist? Moving Beyond the Paradox?
3. The Strategic Role of Technologies.
Why is Strategy in IT Planning Important? What is Strategy? Developing a Strategy. Looking Outward. Looking Inward. What To Look For. Connecting the Dots.
4. Failure Analyses.
Timing is Everything. Unrealistic Expectations. Management Support. Explicit Payoff Metrics. Infrastructure. Are You Ready for Integration? Training.
5. A Process Perspective.
Let's Talk Theory. Advantages of Variance and Process Approaches. Process Approach: A Discussion. Process Approach: An Application. Combining Process and Variance Approaches. Summary.
6. Technology Payoff Metrics-Balanced Multiple Objectives.
Immediate versus Lagged Metrics. Productivity, Profitability, and Customer Value. A Balanced and Inclusive Approach. Recommendations.
7. The Technology Curve.
Is There Evidence for the Existence of Technology Curves? Drawing an S-Curve (adapted from Foster). Implications. Technology Trend Curves. Disruptive Technologies. Technologies of the Future.
8. Technology Justification Models.
The Real Options Approach. Economic Value Added. Statistical Approaches.
9. Implementing IT Payoff Initiatives: A Framework.
Phase I: Exploration. Phase II: Involvement. Phase III: Analysis. Phase IV: Communication.
10. Electronic Commerce: Challenges and Opportunities in Assessing IT Payoff.
Data, Information, and Knowledge. E-Loyalty: Your Payoff in Online Commerce. E-commerce Payoff. Looking to the Future: Challenges in IT Payoff Assessment.
11. Assessing IT Payoff: A Case Study.
Phase 1: Exploration. Phase II: Involvement. Involvement. Phase III: Analysis. Phase IV: Communication. An Update. Conclusion.
12. Succeeding at IT Payoff Measurement: An Action Plan.
Recap. An Action Plan. How to Implement a Measurement System. Capitalizing on the Cascading Effects of IT Payoff. Building an Infrastructure for Ongoing IT Payoff Analysis. Integrating IT Payoff Results in Managerial and Strategic Planning and Decision Making.
Index.
About the Author :
SARV DEVARAJ is a faculty of the Management Department at the Mendoza College of Business, Notre Dame, specializing in technology management, quality and productivity management, and manufacturing strategy. He consults widely in the areas of technology management, performance evaluation, just-in-time manufacturing, work teams, and optimizing manufacturing. He is also a Fellow of India-based software companies. Devaraj speaks frequently at conferences, including the Annual Conference for the Decision Sciences Institute. His work has won several international awards.
RAJIV KOHLI is a faculty in the College of Business and Economics at Lehigh University, specializing in strategic information systems, enhanced decision support systems, process innovation, and the role of information technologies in enabling competitive advantage. Recently, he was an internal Consultant in the Decision Support Services at the corporate office of Trinity Health in South Bend, Indiana. He has worked and consulted with organizations in manufacturing, telecommunications, and healthcare.
Devaraj and Kohli's recent joint publications include "Information Technology Payoff in the Health-Care Industry: A Longitudinal Study," published in the Journal of Management Information Systems and (with Ming Fan) "E-Loyalty: Elusive Ideal or Competitive Edge," published in Communications of the ACM. They are currently jointly researching new methods for analyzing e-commerce customer satisfaction and loyalty.
