From networks to databases, email to voicemail, the amount of capital being invested in information technology each year is staggering. By 1996, U.S. firms were spending more than $500 billion annually on software, networks and staff. The recently merged Bank of America and NationsBank have an initial IT budget of 4 billion dollars. As firms like this push rapidly into the business world of the 21st century, the question has remained: how do firms measure returns from these substantial investments in information technology?
Henry C. Lucas, effectively answers this question by providing a creative and reliable framework for measuring the competitive advantages and profits gained through investments in state-of-the-art information systems. There is value in information technology, and it is possible to show returns, Lucas argues--unfortunately this value just doesn't always show up clearly on the bottom line of a ledger. In five expertly presented sections, he spells out exactly what businesses can expect from their information technology investments--some investments create a measurable value, some do not, but all are important nonetheless. Through a precise mix of frameworks and models, such as an Investment Opportunities Matrix, and punctuated with real examples from successful firms, this is the first book to allow executives to see exactly how their information technology investment can be expected to return value, thereby maximizing their advantages in an age of global competitiveness.
Indeed, firms who manage their information systems most efficiently are best suited to succeed in a rapidly evolving marketplace. With so much at stake, Information Technology is certain to be the essential guide for firms determined to compete and flourish in the highly competitive economy of the next century.
"This is an elegant, non-hype, practical and substantive book about one of the most complex and frustrating issues in modern business: proving and measuring the pay-off of investment in IT. It's among the very best ever on the topic. When 50% of incremental capital investment in this economy is in IT, it's essential reading-and a good read, too."--Peter Keen
"An important book which deals with the central investment dilemma of the Information Age. How and when does one invest in IT? What are the range of payoffs? The book contains a powerful set of ideas drawn from a rich collection of field cases to guide general managers in these investment decisions. A must book for general managers who need to deepen their thought processes in this arena."--Warren McFarlan
"The question of the returns from IT investments has long been a controversial issue. Lucas provides an interesting perspective, one that endeavors to recognize the complexity at the issue. The business reader will find numerous examples of the various types of returns one can obtain from IT. He...develops a framework that permits evaluation of new situations, a useful addition as more and more organizations find IT an integral part of competing in the 21st
century."--Michael S. Scott Morton, Sloan School of Technology, MIT