Supporting Investment Evaluation and Project Management: Toward A Framework of IT/IS Costs

Information Systems (IS) are widely acknowledged as one of the major enablers of business change. However, despite enormous capital IS investments, organizations have not always been able to enjoy commensurate financial returns. Much of the reason for this is that there are considerable costs associated with the adoption of IT/IS, with many of these cost factors being indirect and intangible, and difficult to identify at the project description and justification stage. This paper describes the first phase of a UK-government funded research project that will extend the myopia of traditional direct financial cost analysis through identifying indirect cost factors, together with their respective natures. The need to identify the true level of such costs during the evaluation process is presented, which in doing so, will support an improvement in decision-making and hence, organisational learning will be demonstrated.