Justifying the information technology budget within changing environments

• Authors: C. Francalanci;P. Maggiolini
• Venue: SIGCPR '94 Proceedings of the 1994 computer personnel research conference on Reinventing IS : managing information technology in changing organizations: managing information technology in changing organizations
• Year: 1994

The paper analyzes the relationship between business performance and investments in information technologies. The present economic crisis is shouting unprecedented defiances not only at firms, but also at CIO (Chief Information Officers) and IS professionals in general: big companies are determined on cutting down the IT expense, both in absolute and related to the revenue and it is difficult for the CIO to ask top executives for further investments and even to justify the current levels of expense. In this context, the ex ante justification of single IT investments does not represent a solution to the ex ante economic justification of the IT budget: firms are interested in measuring economic and organizational results of the overall effects of IT investments. Therefore, the research is conducted by investigating the correlation between the aggregate annual expense in information technology and two indexes of firm performance, that are defined and justified in the paper. Results of experimentation conducted on the business data collected by the MIP-Nolan Norton Observatory are presented. Trends confirming theoretical hypotheses are illustrated and possible causes motivating opposite trends are discussed.