Justifying investments in new information technologies
Journal of Management Information Systems
An economic analysis of strategic information technology investments
MIS Quarterly - Special issue on the strategic use of information systems
The productivity paradox of information technology
Communications of the ACM
Strategic management of information technology investments: an options perspective
Strategic information technology management
Middleware: a model for distributed system services
Communications of the ACM
Business process components for distributed object applications
Communications of the ACM
Leveraging the new infrastructure: how market leaders capitalize on information technology
Leveraging the new infrastructure: how market leaders capitalize on information technology
Information technology impact on process output and quality
Management Science - Special issue: Frontier research on information systems and economics
Management Science
Communications of the ACM - Adaptive middleware
The It Value Quest: How to Capture the Business Value of It-Based Infrastructure
The It Value Quest: How to Capture the Business Value of It-Based Infrastructure
Options in the Real World: Lessons Learned in Evaluating Oil and Gas Investments
Operations Research
A Case for Using Real Options Pricing Analysis to Evaluate Information Technology Project Investment
Information Systems Research
Organization Science
An Economic Model of Product Quality and IT Value
Information Systems Research
Journal of Management Information Systems - Special issue: Impacts of information technology investment on organizational performance
A note on project risk and option values of investments in information technologies
Journal of Management Information Systems
Journal of Management Information Systems
Prioritizing a Portfolio of Information Technology Investment Projects
Journal of Management Information Systems
Journal of Management Information Systems
Should We Wait? Network Externalities, Compatibility, and Electronic Billing Adoption
Journal of Management Information Systems
Managing Information Technology Investment Risk: A Real Options Perspective
Journal of Management Information Systems
Theoretical Justification for IT Infrastructure Investments
Information Resources Management Journal
Information Technology and Management
Journal of Management Information Systems
A multi-criteria game theory and real-options model for irreversible ICT investment decisions
Telecommunications Policy
IT project portfolio optimization: a risk management approach to software development governance
IBM Journal of Research and Development
Should We Go Our Own Way? Backsourcing Flexibility in IT Services Contracts
Journal of Management Information Systems
A Study of Sourcing Channels for Electronic Business Transactions
Journal of Management Information Systems
ACM Transactions on Management Information Systems (TMIS)
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Decisions to invest in information technology (IT) infrastructure are often made based on an assessment of its immediate value to the organization. However, an important source of value comes from the fact that such technologies have the potential to be leveraged in the development of future applications. From a real options perspective, IT infrastructure investments create growth options that can be exercised if and when an organization decides to develop systems to provide new or enhanced IT capabilities. We present an analytical model based on real options that shows the process by which this potential is converted into business value, and discuss middleware as an example technology in this context. We derive managerial implications for the evaluation of IT infrastructure investments, and the main findings are: (1) the flexibility provided by IT infrastructure investment is more valuable when uncertainty is higher; (2) the cost advantage that IT infrastructure investment brings about is amplified by demand volatility for IT-supported products and services; (3) in duopoly competition, the value of IT infrastructure flexibility increases with the level of product or service substitutability; and (4) when demand volatility is high, inter-firm competition has a lower impact on the value of IT infrastructure.