Information Technology Investment: Decision-making Methodology (2nd Edition) / Edition 2 available in Hardcover
Information Technology Investment: Decision-making Methodology (2nd Edition) / Edition 2
- ISBN-10:
- 9814282561
- ISBN-13:
- 9789814282567
- Pub. Date:
- 03/24/2010
- Publisher:
- World Scientific Publishing Company, Incorporated
- ISBN-10:
- 9814282561
- ISBN-13:
- 9789814282567
- Pub. Date:
- 03/24/2010
- Publisher:
- World Scientific Publishing Company, Incorporated
Information Technology Investment: Decision-making Methodology (2nd Edition) / Edition 2
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Overview
Product Details
ISBN-13: | 9789814282567 |
---|---|
Publisher: | World Scientific Publishing Company, Incorporated |
Publication date: | 03/24/2010 |
Edition description: | New Edition |
Pages: | 468 |
Product dimensions: | 6.10(w) x 9.00(h) x 1.20(d) |
Table of Contents
Preface vii
List of Tables and Figures xvii
Part II Introduction to Information Technology Investment Decision-Making Methodology
Chapter 1 Introduction to Information Technology Investment Decision-Making 3
Introduction 4
Types of IT Investment Decision-Making Problems 5
What are IT Investment and Decision-Making Methodologies? 8
Limitations of Methodologies 10
Why Study IT Investment and Decision-Making Methodologies? 13
Organizational Strategic Planning in IT Investment Decision 14
How This Book is Organized to Help You Learn 21
Summary 24
Chapter 2 Needs Analysis and Alternative Information Technology Investment Strategies 29
Introduction 30
What is Needs Analysis? 32
Determining IT Processing Capacities and Specifications 35
Alternative IT Investment Strategies 40
What is IT Outsourcing? 42
An IT outsourcing strategy 45
Final comment on IT outsourcing 47
Summary 47
Chapter 3 Measuring Information Technology Investment Performance 53
Introduction 54
The Economics of Information 54
Examples of economic theories of information 55
Why Measure IT Performance? 57
Measures of IT Business Value 59
Financial Performance Measures of IT 60
Business performance measures of IT 62
Strategic performance measures of IT 64
Costs of IT 65
Measures of IT effectiveness value 66
Measures of IT efficiency value 73
Summary 75
Part II Financial Information Technology Investment Methods
Chapter 4 Basic Financial Methods 83
Introduction 84
What are the Basic Financial Methods? 84
What is Breakeven Analysis? 86
A statistical approach to non-quantifiable benefits 89
What is Payback Period Methodology? 90
What is Accounting Rate of Return Methodology? 95
Summary 99
Chapter 5 Other Financial Methodologies 109
Introduction 110
What Types of Methodologies Support IT Investment Decision-Making? 110
Financial techniques for IT investment decision-making 111
Operations research/management science techniques for IT investment decision-making 112
Techniques specifically designed for IT investment decision-making 114
Other techniques for IT investment decision-making 119
What is Present Value Analysis Methodology? 121
Net present value analysis methodology 123
Computer-based solutions 126
Unequal investment sizes 126
Unequal investment lives 127
What is Return on Investment Methodology? 129
ROI strategy for enterprise resource planning systems 130
What is Internal Rate of Return? 132
Computer-based solutions 135
A word about cash flows 136
Summary 136
Chapter 6 Cost/Benefit Analysis 143
Introduction 144
What is Cost/Benefit Analysis? 144
Define problem 145
Identification and quantification of cost and benefit 146
Compare alternatives 150
Sensitivity analysis 156
What is Cost/Effectiveness Analysis? 158
Summary 158
Part III Multi-Criteria Information Technology Decision-Making Methods
Chapter 7 Critical Success Factors, Delphi Method and the Balanced Scorecard Method 167
Introduction 168
What are Critical Success Factors? 168
What is the Delphi Method? 174
What is the Balanced Scorecard Method? 176
Balanced scorecard components 177
Illustration of the balanced scorecard method 184
Final word on balanced scorecards 187
Summary 189
Chapter 8 Multi-Factor Scoring Methods and the Analytic Hierarchy Process 193
Introduction 194
What are Multi-Factor Scoring Methods? 195
Types of multi-factor scoring methods 196
Summary of multi-factor scoring methods solution procedures 198
Sensitivity analysis of multi-factor scoring methods 199
Spreadsheet and computer solutions 201
What is the Analytic Hierarchy Process? 202
The AHP procedure 203
Summary of AHP solution procedure 225
Spreadsheet and computer solutions 225
Summary 227
Chapter 9 Decision Analysis and Multi-Objective Programming Methods 237
Introduction 238
What is Decision Theory? 238
Decision theory problem/model elements 239
Types of decision environments 240
Decision Theory Formulation and Solution Methodologies 241
A decision theory problem/model formulation Procedure 241
Decision-Making Under Certainly 245
Maximax criterion 245
Maximin criterion 245
Decision-Making Under Risk 247
Origin of probabilities 247
Expected value criterion 248
Expected opportunity loss criterion 249
Decision-Making Under Uncertainty 250
Laplace criterion 251
Maximin criterion 253
Maximax criterion 253
Hurwicz criterion 253
Minimax criterion 254
Multi-Objective Programming Methodology 255
What is Goal Programming? 257
Goal programming problem/model elements 258
Goal Programming Problem/Model Formulation 268
GP problem/model formulation procedure 268
GP problem/model formulation problems 269
Computer-based solutions for goal programming 277
Goal Programming Complications and Model Assumptions 282
GP complications 282
GP model assumptions 283
Summary 284
Part IV Other Information Technology Investment Methods
Chapter 10 Benchmarking Techniques and Game Theory 295
Introduction 296
What is Benchmarking? 296
A benchmarking procedure 298
A benchmarking methodology: Gap analysis 300
What is Game Theory? 303
Basic structure of game theory problem/model 304
Objectives and assumptions 306
Game theory problem/model formulation procedure 307
Solution Procedures for Game Theory Problems 310
Rational choice method: A saddle point solution 310
The minimax solution method 315
A minimax solution for a mixed strategy problem 317
A computer-based solution for a mixed strategy problem 319
Summary 321
Chapter 11 Investment Portfolio Methodologies 329
Introduction 330
What are Investment Portfolio Methodologies? 330
Ward's Portfolio Approach 331
Evaluating individual investments 335
Setting priorities 337
Investment Mapping Methodology 343
Mapping the investment portfolio 343
Evaluating IT investments 348
Managing benefits 351
Other Investment Portfolio Methodologies 352
Summary 353
Chapter 12 Value Analysis and Benefit/Risk Methodologies 357
Introduction 358
What is Value Analysis Methodology? 358
What is Benefit/Risk Analysis Methodology? 363
Summary 371
Part V Implementing IT Decision-Making
Chapter 13 Research Suggestions on Implementing IT Investment Methodology 377
Introduction 378
Organizational Impact of Information Technology Investment 378
Previous research on IT's impact on organizations 378
Measures of IT investment 379
Organizational impact of IT investment 381
Understanding Value and Instinct in IT Investment Decisions 383
Determining what's important 383
Defining value in IT investment 384
The role of intuition 386
Making the Best of IT Investment 387
IT investments: Goal and problem 387
Managerial causes 388
Strategies to solve the paradox 390
Summary 392
Chapter 14 Implementing the Outsource or Insource Decision 397
Introduction 398
What is Outsourcing? 399
Why Use Outsourcing? 399
Why Use Insourcing? 401
Strategic Planning with Outsourcing and Insourcing 402
Outsourcing Methodologies 404
Outsourcing evaluation framework 405
Cost/benefit analysis 406
Critical success factors 407
Investment portfolio methodologies 407
Other methodologies 408
Post Outsourcing Decision Considerations 409
Service level agreement 410
Summary 410
Epilogue: The Costs of Not Making the Right Information Technology Decision (and Strategies on How to Avoid Them) 415
Macro Economic View 415
Micro Economic View 417
Strategies for Making the Right IT Investment Decisions and Avoiding IT Costs 422
"So What's the Good News?" 425
Index 433