Business value of information technology in small and medium sized companies

Rózsa, Tünde and Herdon, Miklós (2009) Business value of information technology in small and medium sized companies. In: AVA Congress 4. International Congress on the Aspects and Visions of Applied Economics and Informatics. Book of abstracts. Agroinform Kiadó, Debrecen, pp. 892-901. ISBN 978 963 502 897 9

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Abstract

Organizations that obtain the maximum benefit from their IT investments recognize that, today, most IT investments involve not just technology but business change as well. They are really business investments with a technology component. Success with IT value management starts with joint accountability between IT and business managers. However, the majority appear to be using standard financial measures such as ROI, net present value (NPV), internal rate of return (IRR), or similar metric. While this is certainly an improvement over not measuring anything, exclusively using financial measures has serious flaws. A number of IT value methodologies that were developed during the past few years and employed in actual IT investment analysis such as the Business Value Index (BVI), Total Economic Impact (TEI), Val IT and Applied Information Economics (AIE). All four methodologies provide a set of tools to help organizations more accurately predict returns from their IT investments and overcome many of the weaknesses in using simple financial metrics. Measuring the value of IT-enabled business change will be critical to almost every organization as technology becomes embedded in virtually every business process. The most important IT tool in companies is the integrated information systems including the standard ERP, hardware, communication networks and the human resources as users. The selection and implementation of ERPs are very important and long term decision making. Supporting the evaluation of ERP in its life cycles decision tools were developed by our research work. These tools are the Services assisting pre-selection (ERP-Select), Decision supporting tool capable of evaluating ERP (ERP-Compare), Decision supporting tool (ERP-Eco) developed for the evaluation of economic value of ERP.

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