IT Investment Decisions in Industry 4.0: Evidences from SMEs

2020 ◽  
pp. 77-92
Author(s):  
Niloofar Kazemargi ◽  
Paolo Spagnoletti
Keyword(s):  
Industry 4.0 ◽  
Investment Decisions ◽  
It Investment

Strategic IT Investment Decisions

2011 ◽  
pp. 3589-3593
Author(s):  
Tzu-Chuan Chou ◽  
Robert G. Dyson ◽  
Philip L. Powell
Keyword(s):  
Organizational Performance ◽  
Decision Process ◽  
Investment Decision ◽  
Investment Decisions ◽  
Decision Processes ◽  
It Investment ◽  
Strategic Investment ◽  
Integrative Framework ◽  
Concept Of Information ◽  
Information Intensity

As many as half the decisions taken in organizations result in failure (Nutt, 1999). As information technology (IT) assumes a greater prominence in firms’ strategic portfolios, managers need to pay more attention to managing the technology. However, while IT can have a significant impact on organizational performance, it can also be a major inhibitor of change and can be a resource-hungry investment that often disappoints. Organizations can best influence the success of IT projects at the decision stage by rejecting poor ones and accepting beneficial ones. This may enable better implementation, as Nutt (1999) suggests most decision failures are due to implementation failure that tends to be under managers’ control. However, little is known about IT decision processes. Research demonstrates the importance of managing strategic IT investment decisions (SITIDs) effectively. SITIDs form part of the wider range of corporate strategic investment decisions (SIDs) that cover all aspects in which the organization might wish to invest. Strategic investment decisions will have different degrees of IT intensity that may impact outcome. IT investment intensity is the degree to which IT is present in an investment decision. That is, some decisions will be wholly about IT investments while others will have little or no IT—most, though, will be blended programs of IT and non-IT elements. Here, IT investment intensity is defined as the ratio of IT spending to total investment. The higher the IT investment intensity, the more important IT is to the whole investment. For example, Chou, Dyson, and Powell (1997) find IT investment intensity to be negatively associated with SID effectiveness. The concept of IT intensity is similar to, but also somewhat different from, the concept of information intensity. Information intensity is the degree to which information is present in the product or service (Porter & Millar, 1985). Management may use different processes in order to make different types of decisions (Dean & Sharfman, 1996). The link between decision process and outcome is so intimate that “the process is itself an outcome” (Mohr, 1982, p. 34). This may imply that the link between IT investment intensity and SID effectiveness is not direct but that the impact of IT investment intensity may be through the decision process. If different IT intensity in projects leads to different decision processes, leading to different outcomes, then it is important to know what factors act in this, in evaluating and managing SITIDs. This chapter presents an integrative framework for exploring the IT investment intensity-SID effectiveness relationship.

AMERIREAL Corporation

2011 ◽  
pp. 21-31
Author(s):  
Mo Adam Mahmood ◽  
Gary J. Mann ◽  
Mark Dubrow
Keyword(s):  
Information Technology ◽  
Organizational Performance ◽  
Investment Decisions ◽  
Optimal Investment ◽  
Student Thinking ◽  
It Investment ◽  
The Subject ◽  
Case Based

This instructional case, based on an actual firm’s experience (name changed) is intended to challenge student thinking with regard to the extent to which information technology (IT) can demonstrably contribute to organizational performance and productivity, and to which users of IT can relate their investment decisions to measurable outcomes. Relationships between an organization’s investment in IT and the effect of such investments on the organization’s performance and productivity have long been the subject of discussion and research. Managers, interested in knowing the “payoff” of such investments, are continually seeking answers to this question. A failure to understand the benefits of IT investment, or an over- or under-estimation of the benefits of a planned investment in IT relative to the costs, will likely result in less than optimal investment decisions.

Managing Strategic IT Investment Decisions

2005 ◽  
pp. 1875-1879
Author(s):  
Tzu-Chuan Chou ◽  
Robert G. Dyson ◽  
Philip L. Powell
Keyword(s):  
Organizational Performance ◽  
Investment Decision ◽  
Investment Decisions ◽  
Decision Processes ◽  
It Investment ◽  
Strategic Investment ◽  
Intensity Information ◽  
Total Investment ◽  
Concept Of Information ◽  
Information Intensity

IT can have a significant impact on organizational performance, but it can also be a major inhibitor of change and can be a resource-hungry investment that often disappoints. Organizations can best influence the success of IT projects at the decision stage by rejecting poor ones and accepting beneficial ones. However, little is known about IT decision processes. Research demonstrates the importance of managing strategic IT investment decisions (SITIDs) effectively. SITIDs form part of the wider range of corporate strategic investment decisions (SIDs) that cover all aspects that the organization might wish to invest in. SIDs will then have different degrees of IT intensity that may impact on outcome. IT investment intensity is the degree to which IT is present in an investment decision. Here, IT investment intensity is defined as the ratio of IT spending to total investment. The higher IT investment intensity, the more important IT is to the whole investment. For example, Chou et al. (1997) find IT investment intensity to be negatively associated with SID effectiveness. The concept of IT intensity is similar to, but also somewhat different from, the concept of information intensity. Information intensity may be defined as the degree to which information is present in the product or service of a business (Porter & Millar, 1985).

Managing Strategic IT Investment Decisions From IT Investment Intensity to Effectiveness

2002 ◽  
pp. 141-157
Author(s):  
Tzu-Chuan Chou ◽  
Robert G. Dyson ◽  
Philip L. Powell
Keyword(s):  
Decision Making ◽  
Information Technology ◽  
Analytical Model ◽  
Investment Decisions ◽  
Evaluation Process ◽  
Empirical Testing ◽  
It Investment ◽  
Organizational Decision Making ◽  
Information Technology Projects ◽  
Strategic Investment

Many information technology projects fail, especially those intended as strategic. Yet, there is little research that attempts to explain the link between the IT investment intensity of strategic investment decisions (SIDs) and organizational decision-making, in order to understand this phenomenon. This paper proposes an analytical model employing a number of constructs: effectiveness of decisions, interaction and involvement in the decision-formulating process, accuracy of information and strategic considerations in the evaluation process, rarity of decisions, and the degree of IT intensity of an investment in strategic investment decisions. The model explores the relationships influencing the effectiveness of decisions. Empirical testing is based on a sample of 80 SIDs from Taiwanese enterprises. The results show that interaction, accuracy of information, and strategic considerations are mediators in the linkage of IT investment intensity and the effectiveness of SIDs. The implications of these findings for the management of strategic IT investment decisions are discussed.

scholarly journals Acts of faith: instinct, value and IT investment decisions

2000 ◽  
Vol 15 (3) ◽  
pp. 231-241 ◽  
Author(s):  
Frank Bannister ◽  
Dan Remenyi
Keyword(s):  
Investment Decisions ◽  
It Investment

How enterprise architecture improves the quality of IT investment decisions

2019 ◽  
Vol 152 ◽  
pp. 134-150 ◽  
Author(s):  
Martin van den Berg ◽  
Raymond Slot ◽  
Marlies van Steenbergen ◽  
Peter Faasse ◽  
Hans van Vliet
Keyword(s):  
Enterprise Architecture ◽  
Investment Decisions ◽  
It Investment

scholarly journals Acts of Faith: Instinct, Value and it Investment Decisions

2000 ◽  
Vol 15 (3) ◽  
pp. 231-241 ◽  
Author(s):  
Frank Bannister ◽  
Dan Remenyi
Keyword(s):  
Evaluation Research ◽  
Investment Decisions ◽  
Decision Makers ◽  
Small Subset ◽  
It Investment ◽  
Evaluation Methodologies ◽  
Complex Processes ◽  
Conference Papers ◽  
Core Issues ◽  
Single Technique

Although well over 1000 journal articles, conference papers, books, technical notes and theses have been written on the subject of information technology (IT) evaluation, only a relatively small subset of this literature has been concerned with the core issues of what precisely is meant by the term ‘value’ and with the process of making (specifically) IT investment decisions. All too often, the problem and highly complex issue of value is either simplified, ignored or assumed away. Instead the focus of much of the research to date has been on evaluation methodologies and, within this literature, there are different strands of thought which can be classified as partisan, composite and meta approaches to evaluation. Research shows that a small number of partisan techniques are used by most decision makers with a minority using a single technique and a majority using a mixture of such techniques of whom a substantial minority use a formal composite approach. It is argued that, in mapping the set of evaluation methodologies on to what is termed the investment opportunity space, that there is a limit to what can be achieved by formal rational evaluation methods. This limit becomes evident when decision makers fall back on ‘gut feel’ and other non-formal/rigorous ways of making decisions. It is suggested that an understanding of these more complex processes and decision making, in IT as elsewhere, needs tools drawn from philosophy and psychology.

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