Valuation on the Intangible Benefits of EVMS using CVM

Abstract

There has been a lot of controversy about whether the return on IT (Information Technology) is adequate. While the number of articles on IT evaluation has been substantial, limited attention has been given to the value of an intangible benefit. This paper aims to suggest an approach to putting a financial estimate on the intangible benefit of IT applications. The authors' chose a sample system for the evaluation and utilized the contingent valuation method to quantitatively measure the intangible value. Then, a valuation and analysis model were suggested for the quantitative valuation of the intangible benefit from IT adoption.

Measuring the Immeasurable? the Intangible Benefits of Digital Information

“…The rules are derived both from ordinary views on how to express tangible benefits. One example is the CVM that expresses the customers' willingness to pay for the resource [25] or the AHP [16]. The latter is a method for refining and structuring goals in an organization, where the intangible benefits are compared and prioritized concerning the organizational goals.…”

“…Two of the other methods use surveys in their measurement methods to find the intangible benefits. Kim et al [25] use a survey to find the willingness to pay for the information system, which is viewed as the total intangible benefit. Chircu and Kauffman [7] use a survey to understand the users' eagerness to adopt the system, implying that the intangible benefits are viewed as usage of an information system, and estimate a cost saving based on the usage.…”

“…Input/Output of measurement process Mutschler et al [33] I = factors that influence benefits of the system, O = economic measurements Kim et al [25] I = surveys with questions related to the resource, O = monetary value Chircu and Kauffman [7] I = surveys with questions about adoption and interviews to understand the barriers, O = percentages, connected to adoption of IS, which can be turned into financial values. [32] I = identified benefits, O = cash flow.…”

Willingness to pay for family education and counselling services provided by critical care advanced practice nurses

“…The initial bid price was 20 000 KRW (16.51 USD), 30 000 KRW (24.77 USD), 40 000 KRW (33.02 USD), or 50 000 KRW (41.28 USD) (Table ). These initial bid prices were established on the basis of a pretest with 40 respondents that included the following open‐ended question: “How much will you pay for this service?” The first bid prices were based on the prices at the 20%, 40%, 60%, and 80% levels of the cumulative distribution from the pretest (Kim, Kim, & Kang, ; Kwon & Ryu, ). One of these four initial bid prices was randomly assigned to each participant.…”