A model for investment justification in information technology projects

To remain competitive and ever increasingly sophisticated in the marketplace, businesses must invest in Information Technology (IT) if they are to survive in the long-term. Advances in IT have enabled new competitors to enter existing markets more readily, which has stimulated and strengthened the paradigm of global competitiveness. At the same time, increasing economic pressures are forcing businesses to reevaluate their IT operations. In response to the changing business environment and to remain competitive and improve organisational performance some businesses have strategically made considerable investments in IT, yet their benefits are difficult to quantify. With this in mind, this paper aims to study the justification for investment in IT projects, by examining tangible and intangible benefits such as competitive advantage and securing future business by facilitating appropriate management change. A model to determine whether or not to invest in IT for any given company is presented. The developed model is then applied to a case study to analyse the implications of implementing IT and its impact on organisations. r 2001 Elsevier Science Ltd. All rights reserved.