Toward it value mapping - An approach to value-based IT management

Recent research has shown that companies face considerable difficulties in implementing a value-based management of their IT portfolios. This paper therefore presents an approach for measuring and managing the business value of IT investments. To ensure practicability, our approach is derived from a set of practice-based requirements extending previous empirical work. In our conceptual model we distinguish between capital budgeting and ongoing value management. For capital budgeting we propose to assess IT investments according to their expected business value by using net present value analysis and a scoring model. For ongoing value management we recommend to keep track of a set of project specific key performance indicators to ensure that the desired benefits are realized. In order to link these two fundamental processes, value drivers and measurable performance indicators have to be identified. Thus we combine established evaluation for an integrated IT Portfolio assessment considering financial, non-financial and risk effects as well.