Matakuliah
Tahun
: A0304 - Evaluasi Efektivitas Sistem Informasi
: 2006
The elusive nature of IT benefits
Pertemuan 01-02
1
Introduction
• Too much spent and not enough return
obtained from IT expenditure?
• Some IT investment benefits cannot be
stated in monetary terms
2
Economics of information
• Which information assist individual?
• Measuring & managing IT benefits is
difficult business challenge  no
comprehensive economics of
information has been developed.
• Reason : difficult subject, ignorance
• Progress : more attention in
understanding potential and actual
benefits
3
Problems with IT benefit
measurement and management
1. Benefits and identifiable performance
improvements
• As early as possible in development cycle,
before project begin
2. The issue of information systems reach
• Different corporate issues, problems, and
resources. Ex : payroll system
3. Tangible and intangible benefits
• Tangible : directly improve performance
(cost and profit)
4
• Intangible : measuring instruments
Problems with IT benefit
measurement and management
4. Benefit evolution
• Unrealistic to expect success at future
benefit identification
• Measures of IS efficiency do not exist
• Dissatisfaction in IS operation
5
Investment, value and economics
• IT investment has no direct value in its
own right
• IT benefits are not directly technology
issue, but business initiatives  Need to
be measured by P&L people
• Investment good is desired because it can
be used to produce other goods and
services
6
Relationships between business
process
and IT investment
Changes to process and practices 
IT investment to supported improvements 
Business performance improvements 
Improved profit and ROI
7
IT and derived value
• IT investment  achieve productivity
improvement? Sunk cost? Ex : customer
satisfaction.
• System’s principal stakeholders : specific
goals, timetable needs, exact changes,
individual, responsibility, review
• IS only has value when used with other
resources as part of business process that
result effectiveness in organization
8
Looking for benefits and value
• There is no standard way of combining
IT with other resources or with people
• The combination is depend on the
context of business process
• Give people a primary role
9
Primary Stakeholders
•
•
•
•
Has the most loss/gain in the investment
As center stage that give support
Can directly influence the success/failure
Place greater emphasis on people than on
technologies
• Eliminate culture gap between P&L people
and IT people
10
IT Professionals
• Technical development/technical aspects
• Example :Internal staff, Department IT
staff, Contractor, Consultant, Outsource
contractors
• Play greater role in the success of IT
investment
• Not to identify benefits or justify
expenditures on the systems.
11
Financial Services
• Make funds available, arrange contracts,
ensure goods are received and payments
are made
• Example : Financial managers,
accountants, capital budgeting staff,
corporate treasury staff, corporate
planners, corporate strategist, internal
auditor, external auditor
12