Justifying investments in new information technologies
Journal of Management Information Systems
Case study of electronic banking at Meridian Bancorp
Information and Software Technology - Information and software economics
Strategic management of information technology investments: an options perspective
Strategic information technology management
Electronic markets and electronic hierarchies
Communications of the ACM
A two-level investigation of information systems outsourcing
Communications of the ACM
Cost-Benefit Analysis in Information Systems Development and Operation
ACM Computing Surveys (CSUR)
Real options analysis of the timing of IS investment decisions
Information and Management
Information Systems Outsourcing; Myths, Metaphors, and Realities
Information Systems Outsourcing; Myths, Metaphors, and Realities
A Case for Using Real Options Pricing Analysis to Evaluate Information Technology Project Investment
Information Systems Research
Journal of Management Information Systems
Fundamentals of Investments
Research on cost allocation for interorganisational systems
International Journal of Networking and Virtual Organisations
DESRIST'11 Proceedings of the 6th international conference on Service-oriented perspectives in design science research
Should We Go Our Own Way? Backsourcing Flexibility in IT Services Contracts
Journal of Management Information Systems
The impact of information and communication technology on skilled labor and organization types
Information Systems Frontiers
Information Systems Frontiers
Investments in information systems: A contribution towards sustainability
Information Systems Frontiers
Green information technology strategic justification and evaluation
Information Systems Frontiers
| Hi-index | 0.00 |
The decisions confronting information technology (IT) managers have changed a great deal since the early 1970s. The key decisions three decades ago were related to the management of application development projects and operations centers. Today, the key decisions are quite different. What level of service should the firm provide end-users? Should IT services, development projects and the ownership and management of operations centers be outsourced? IT investments attempt to satisfy specific needs. Because of environmental differences and differences in the cost structure and benefits of alternative ways in which these needs can be met, the answers to these questions may differ across firms. Modern financial analysis can provide insights to help managers deal with many of the problems they currently face. We use modern financial theory to show how the value of IT investments can be affected by some of the choices made by managers. We show how the market risk of demand and the market risk of costs affect the market risk and value of IT investments. We consider three types of investment decisions: outsourcing versus in-house services; investments in interorganizational systems; and determining the optimal level of IT services that should be provided. Our analysis indicates that: (1) as the market risk of demand for operations decreases, firms are less likely to outsource operations; (2) the value of an investment in an interorganizational system increases as the market risk of costs increases; and (3) the optimal level of user service is inversely related to service demand risk and is directly related to the market risk of service costs.