A Comprehensive and Cohesive IT Value Management Capability: Case Studies in the North American Life Insurance Industry

IT professionals and researchers continue to seek guidance on how to best derive sustainable business value from investments in information systems, and to identify specific governance mechanisms which can be employed to ensure positive results. Building on the resource-based theory of the firm, this long-term interpretive field study of IT strategic planning processes, conducted from 1992 to 2000, proposes that a critical organizational capability, which we call “IT value management,” is essential to effective IT planning. While previous studies viewed IT planning in terms of discrete investment decisions, this study examined how companies achieve business value from IT-intensive business initiatives over time through a series of adaptive, ongoing processes. The findings from the case studies described herein suggest that cohesive integration among four specific processes is critical to attaining sustained business value from IT investments. We propose that the more cohesive the value management capability, the more likely that a firm's IT-intensive strategic initiatives will lead to improved business performance. The study further suggests that comprehensiveness is an important aspect for some, but not for all value management processes.