Valuation of IT-investment A valuation method for ICC-investment

Abstract

Organisational spending on IS/IT is continuously expanding. Investments in IS/IT are usually seen as necessary without leading to direct organisational benefits. Only direct and easy measured benefits are valuated when using traditional IT-valuation methods. This leaves out benefits that could be vital for organisations only because they are seen as difficult to measure. Organisations often fail in valuating IT-infrastructure components since they view this as strictly technical and separated from business. One such IT-infrastructure component is an ICC (Integration Competence Center). An ICC can be described in light terms as a central hub that handles communication between information systems in an organisation. This thesis is a continuation of a previously conducted research on the same subject. The previous research was conducted in collaboration with the IT-consultant company Zystems. Zystems delivers ICCs to their customers but were using an unfulfilling valuation method for ICC-investments. One result of the previous research was six demands that were claimed as important to consider in an improved valuation method for ICC-investments. The purpose of this thesis was to construct a new valuation method for ICC-investments, based on these expressed demands. These six demands had to be investigated in relation to the intended environment where it would be applied. The valuation method should be applied by Zystems when valuating benefits of an ICC on current and potential customers in the government sector. One of the results in this thesis was that the complexity of the studied environment had to be investigated. This was performed during empirical studies with Zystems and their current and potential customers in the government sector. The result from the empirical studies where areas of interest that defined the complexity of the investigated environment. Complexity of the environment affected how the six expressed demands could be fulfilled in the new valuation method for ICC-investments. Final result of this thesis was a constructed valuation method for ICC-investments that include the expressed demands. Except for fulfilling the six expressed demands, the new ICC-valuation method also enables two other factors that was not mention in the six demands. These factors are however important to consider and was therefore included in the new valuation method for ICC-investments.