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Evaluation of business value of IT-system scenarios: a case study at a large north European power company
KTH, School of Electrical Engineering (EES), Industrial Information and Control Systems.
KTH, School of Electrical Engineering (EES), Industrial Information and Control Systems.
KTH, School of Electrical Engineering (EES), Industrial Information and Control Systems.ORCID iD: 0000-0003-3922-9606
2007 (English)In: PICMET '07: PORTLAND INTERNATIONAL CENTER FOR MANAGEMENT OF ENGINEERING AND TECHNOLOGY, 2007Conference paper, Published paper (Refereed)
Abstract [en]

This paper presents a method, the KTH1 IT Investment Evaluation Method, to assess the business value of IT-investments. The method aims at a priori and at a relative low cost of investigation assesses the business value of IT-systems scenarios, i.e. alternative combinations of IT-systems intended to support a particular business area. First, the scenarios are evaluated with respect to their technical quality. Second, the technical attributes used for this technical evaluation are related to business value dimensions, i.e. it is determined in what ways certain functions and non-functional attributes generate business value. Third, the business value dimensions are prioritized by the business managers. Finally, the business value of each scenario is established by combining the technical assessments with the relations to the business value dimension found in the second step and the prioritizations done by business managers. All parts of the method have been verified in comprehensive case study at a large European power company and the results are presented in the paper.

Place, publisher, year, edition, pages
2007.
National Category
Computer and Information Science
Identifiers
URN: urn:nbn:se:kth:diva-7539DOI: 10.1109/PICMET.2007.4349327ISI: 000257655900016Scopus ID: 2-s2.0-47849104725ISBN: 978-1-890843-16-8 (print)OAI: oai:DiVA.org:kth-7539DiVA: diva2:12594
Conference
Conference of the Portland-International-Center-for-Management-of-Engineering-and-Technology (PICMET 2007) Portland, OR, AUG 05-09, 2007
Note
QC 20100608Available from: 2007-10-03 Created: 2007-10-03 Last updated: 2011-07-13Bibliographically approved
In thesis
1. Business Value Assessment of IT Investments: An Evaluation Method Applied to the Electric Power
Open this publication in new window or tab >>Business Value Assessment of IT Investments: An Evaluation Method Applied to the Electric Power
2007 (English)Doctoral thesis, comprehensive summary (Other scientific)
Abstract [en]

s the dependence of IS/IT has grown in modern organizations, IT investments have soared in the last couple of decades. Large amounts of money are spent with the hope that the investments will generate value for the business organizations using the systems. It is hence easy to understand the needs for methods to assess the business value of IT-investments. The investment decision is basically about selecting the best IT-system or the best combination of IT-systems, i.e. the system(s) that provides the most business value in dimensions that are important business-wise. However, a problem with many of the avail-able methods is that they often fail to concretely explain what technical characteristics the IT systems(s) should have to achieve the business value desired. A complicating aspect of IT-investment evaluations is also that the evaluations usually include a high degree of un-certainty.

In this thesis, an IT investment evaluation method is presented that indicatively assesses the differences in contribution to business value from IT-investment alternatives. The method provides, at a relatively low cost of investigation, indications of not only the technical differences between the IT-investment alternatives in a specific investment situation, but also an assessment of the differences in types and amounts of their business value. The presented method has been applied in a large case study at an electric power company. Furthermore, it also incorporates concepts found within Enterprise architecture (EA), particularly in how the information used in the evaluation is collected.

The presented thesis is a composite thesis that, besides an introduction, includes five papers (paper A-E). Paper A presents an outline of the method as well as its application in the case study. It also presents the theoretical fundaments for the criteria used for the technical evaluation and the business value assessment including the method’s applications in relation to Enterprise architecture. The following two papers primarily present necessary steps in the development of the method. First, paper B presents the process to develop a functional reference model (used for the functional assessments in the method), including its application in the case study. Second, a breakdown of the term business value into a set of IS/IT-affected value dimension is presented in paper C. The last two papers present the final steps, i.e. the technical evaluation of the investment alternatives (paper D) and the final business value assessment (paper E). The papers include the methods to perform these analyses as well as the application of the method in the case study and the results of the case study.

Place, publisher, year, edition, pages
Stockholm: KTH, 2007
Series
Trita-EE, ISSN 1653-5146 ; 2007:50
Keyword
IT-investments, IT-investment evaluation, Business value assessments, Enterprise architecture, Technical evaluation of IT systems, Electric power industry
National Category
Other Mechanical Engineering
Identifiers
urn:nbn:se:kth:diva-4505 (URN)
Public defence
2007-10-30, Sal F3, KTH, Lindstedtsvägen 26, Stockholm, 10:00
Opponent
Supervisors
Note
QC 20100608Available from: 2007-10-03 Created: 2007-10-03 Last updated: 2010-06-08Bibliographically approved

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Ekstedt, Mathias

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