How Benefits from is/IT Investments are Successfully Realized: the Role of Business Process Know How and Benefits Management Practices

Although organizations continue to make substantial investments in information systems and information technology (IS/IT), the successful realization of benefits from such investments has consistently been reported as one of the major organizational challenges. From a project perspective, this paper examines whether benefits management (BM) practices can be considered a viable approach to achieve the anticipated benefits. Drawing on resource-based theory (RBT) as well as the BM literature, we derive a structural equation model consisting of eight propositions. These propositions are tested using data collected from 454 projects. Our analysis of the data by means of partial least squares (PLS) finds that BM positively impacts benefits realization success (BRS). Specifically, organizations should acknowledge the importance of (1) benefits analysis, (2) benefits planning, and (3) benefits review when seeking to realize benefits. Furthermore, the findings suggest that benefits analysis is facilitated by the contextual constructs business process knowledge and business/IT communication. We also found a relationship between top management support and the contextual constructs. Collectively, the results have important theoretical and practical implications, as they provide quantitative evidence of how IS/IT investments should be managed to successfully realize benefits. Based on our results, we argue that BM is a basis for the successful realization of benefits. Nevertheless, organizations need to ensure that project teams have sufficient understanding of (1) the IS/IT, (2) the business, and (3) the interaction between IS/IT and the business. The latter is specifically the most challenging and most important competency that a project team can possess. We expect our research to spur organizations to instill a shared understanding of how IS/IT relates to the business and vice versa within their project teams, which will intensify BM’s positive effect on BRS.