These methods also assume the availability of funds for all cost-justified projects. Yet, funds are always limited. Furthermore, IT organizations typically conduct the cost-benefit analyses and select the IT projects with limited input from the user community. Determining the Value of IT Projects To determine the value of IT investments according to business priorities, agencies can use the techniques of Information Economics 9 to go beyond traditional NPV and ROI analysis methods. Information Economics is based upon the concepts of value and two-domain analysis.
Value is the contribution of IT to enable the success of the business unit.
Two-domain analysis segments organizations into business and technology domains to assess the impact of IT investments on each domain. The technology domain provides IT services to the business domain. Decisions to invest in technology solely for technology reasons rarely support improved business performance. For example, standardizing workstation configurations reduces the cost of maintenance and training. Although the investment appears necessary and prudent, the action has little direct bearing on the business.