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Financial measures to assess the IS contribution

What financial measures can be used to assess the contribution the IS organization makes to the business? What are the caveats involved with these measures?

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Information Technology (IT) has become crucial to achieve organizational and strategic goals. Additionally, investments in IT never cease to grow, and business managers often worry about the fact that the benefits of these investments might not be as high as initially expected. The industry likes to call this phenomenon the "IT investment-paradox", or the "IT Black Hole". Large sums are invested in IT, and seem to be swallowed by a large black hole without rendering many tangible returns.

In order to be able to evaluate IT/IS-investments, many methods and techniques have been suggested over the years. More traditional methods focus on financial measures that have long been known: the "return on investment" (ROI), ...

Solution Summary

Information Technology (IT) has become crucial to achieve organizational and strategic goals. Additionally, investments in IT never cease to grow, and business managers often worry about the fact that the benefits of these investments might not be as high as initially expected. The industry likes to call this phenomenon the "IT investment-paradox", or the "IT Black Hole". Large sums are invested in IT, and seem to be swallowed by a large black hole without rendering many tangible returns.

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