Evaluating costs and benefits when implementing an information system

Abstract

In the beginning of 1998, Autoliv Inc. took the decision to invest in a global information system (IS), and attention on how this investment could be evaluated was raised. In this thesis, a case study of Autoliv Sverige will be conducted, serving as an example for the rest of the Autoliv group. The purpose of this thesis is to evaluate the potential IS benefits and dis-benefits, and to supply a decision base to facilitate an efficient further implementation of the IS at Autoliv Inc. This study includes an identification of cash inflows as well as cash outflows resulting from the system. It also includes an investigation and analysis of the potential subjective value effects resulting from the IS. Primary data collected through interviews gave the required information about the current situation at Autoliv Sverige. Questionnaires were sent to three different groups in Autoliv Inc. to collect information about intangible benefits. The case study on tangibles shows that the time to transfer the product data into the IS highly affects the result of the investment. The time it takes to learn the IS is vital for realizing the benefits. The proposed network has a large impact on the net present value of the investment. The case study on intangibles shows that there is an overall consensus of opinions between the groups in the company about the PDM systems' excellence in realizing the identified intangible benefit types. Autoliv Sverige is highly dependent on the other companies in the Autoliv group implementing the IS. Only then Autoliv Sverige is able to realize most of the benefits.