A Framework for Assessing the Business Value of Information Technology Infrastructures

Information tecbnology (IT) infrastructure investments are an extremely important part of e-business and constitute a major portion of IT investments in many organizations. IT infrastructure investments include investments in connectivity, systems integration, and data storage tbat may be used by multiple applications. Prior researcb has recognized tbe importance of a flexible IT infrastructure as a source of competitive advantage. Evidence regarding tbe value of IT infrastructures is anecdotal, and tbere is a realization tbat large investments in IT infrastructures are often difficult to justify. Tbis paper expands on tbe idea tbat tbe value of an IT infrastructure depends on its use in an organizational context, and presents a relatively simple approacb to understanding and assessing tbe value of IT infrastructure investments. This approacb is based on the asset valuation literature in finance. An example is provided to illustrate tbe proposed approacb, and managerial implications are discussed.