Justifying Investments in New Information Technologies

The impact of business analytics on supply chain performance

“…However, advanced uses of IS should be more closely aligned with an organization's strategy [27]. It is also possible to initially build the infrastructure and to then decide on when and how much additional commitment should be made to build on top of that [6,22,23]; in our case, proper IS support can be developed earlier and later used to support the implementation of BA.…”

Towards a Well-Founded Valuation of Managerial Flexibilities in IT Investment Projects - A Multidisciplinary Literature Review

“…Accordingly, several authors suggest that dcof follow GBM similarly to dcif and then apply the Margrabe Model (e.g., Bardhan et al 2004;Dos Santos 1991;Kumar 1996;Kumar 2002;Taudes 1998). However, GBM does not seem to be plausible for all types of ITIPs especially if dcof mainly result from the following two sources: cash-outflows for IT infrastructure (e.g., hardware costs) and labor costs (e.g., software developers).…”

“…Consequently, decision makers have to be aware of the possibility that the value of a real option may be affected if dcif and dcof of the underlying ITIP are correlated (cf., Dos Santos 1991;Taudes 1998). Accordingly, assumption (A2) is relaxed as follows:…”

“…To value such real options most approaches featuring in the Information Systems (IS) literature use standard financial option pricing models such as the Black-Scholes model (BSM; e.g., Benaroch et al 2006;Heinrich et al 2011;Taudes 1998), the Binomial model (e.g., Kambil et al 1991;Khan et al 2013), or the Margrabe model (e.g., Bardhan et al 2004;Dos Santos 1991). However, these approaches are currently rarely applied by companies since managers are not satisfied with the results given that investment projects are far more complex than financial options.…”

Evaluating Information Technology Investments in Emerging Economies Using Activity‐Based Costing

“…The evaluation of investments in information technology (IT) represents one of the greatest challenges faced by business managers (Dos Santos, 1991;Thatcher and Oliver, 2001). Evaluating IT-related investments in emerging economies is an even more difficult task, due to generally even less predictable changes in the social, political, and economic infrastructure.…”