Some current practices in evaluating IT benefits in South African organisations

Abstract

IT has a dynamic impact on organisations and little research has been done especially on the extent to which senior executives take the different system types into account when they appraise an IT investment. The aim of this paper is to identify current IT investment evaluation practices using the framework of system portfolios identified by McFarlan. Twenty four respondents were drawn from business organisations. Wherever possible, Chief Information Officers (CIOs) and Senior Business Executives (SBEs) were interviewed from the same organisation. Content analysis was used to identify fourteen major concepts from the interview transcripts. The results of this study indicate that payback continues to be the most popular technique/or appraising IT investments. CIOs tend to adopt rigorous cost benefit analyst techniques regardless of system type, whilst SBEs take cognisance of the system type and are comfortable with the informality of intangible benefits arising from strategic systems. Neither group regularly conducted post-implementation audits. The SBEs felt that customer response was a sufficient ex-post measure of the benefits from IT, CIOs gave lack of time as their commonest reason for omitting post-implementation auditing and felt that formalised post-implementation auditing would enhance the image of IT within the organisation.