Management of lifecycle costs and benefits: Lessons from information systems practice

  • Authors:

  • Egon Berghout;Menno Nijland;Philip Powell

  • Affiliations:

  • Faculty of Economics and Business, University of Groningen, P.O. Box 800, 9700 AV, The Netherlands;Information Systems and Innovation Group, Department of Management, London School of Economics and Political Science, Houghton Street, London WC2A 2AE, United Kingdom;School of Business, Economics and Informatics, Birkbeck, University of London, Malet Street, Bloomsbury, London WC1E 7HX, United Kingdom

  • Venue:
  • Computers in Industry
  • Year:
  • 2011

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Abstract

Assessing the economic feasibility of information systems (IS) projects and operations remains a challenge for most organizations. This research investigates lifecycle cost and benefit management practices and demonstrates that, overall, although organizations intend to improve their information technology (IT) management, they squander many opportunities to do so. There are inconsistencies in cost/benefit management practices. Most organizations that integrate operational benefits into investment analyses do not acknowledge operational costs. Planned project goals are seldom formulated in a verifiable or measurable way; there is little structured feedback on individual lifecycle activities, nor co-ordination of various activities. Thus, the attitude towards cost/benefit management appears primarily context-related and incident-driven. A further development of the system lifecycle-based approach is needed to improve IT cost/benefit management theory and practice, because a coherent set of methods is required to assess IT costs and benefits throughout the entire lifecycle.