Prior to that, there was the tendency to cut investment in systems instead of cutting something else. So for the past 10 years, senior executives at JC Penney have reviewed every major information technology proposal just as they would any other investment the company is considering, Evans says. The first step is for business units requesting new applications to create proposals. An information technology employee then reviews proposal drafts. At JC Penney, both the business units and top corporate managers approve information technology investments and review whether benefits were as expected.
Business units seeking new applications create proposals.
An IS employee reviews proposal drafts. An IS employee helps business managers estimate both direct and indirect costs. Traditional return on investment is calculated based on quantifiable costs and benefits. Nonquantifiable benefits are included as part of the overall report to the management committee. Controller of the business units reviews final reports for approval.