Problems and Issues Relating to IT Investment Evaluation: Experiences from Scottish and Benelux Studies

Despite the growing number of IT investment evaluation methods and approaches, many organizations are still experiencing difficulties with this complex and sophisticated area. Within an environment of increasing competitiveness, pressures to reduce overheads as well as the introduction of new working practices, companies are turning to new IT investments in order to survive in uncertain and volatile markets. One sector that is experiencing such pressures is the financial services sector that is undergoing fundamental changes in terms of its structure, products and working practices, in which the investment in new IT has been a key enabling factor.

This paper will report on initial findings from on-going research that has been conducted within the Benelux and Scottish financial service sectors in which the process of IT investment evaluation was critically evaluated from the perspectives of: key stakeholders, evaluation processes, evaluation criteria and project descriptions and champions. A comparison between the Benelux and Scottish financial sectors is made.

The research confirms earlier research results regarding requirements to evaluation methods; however, it also identifies the concept of ‘power’ and power behaviour as a dominant factor regarding the actual use of evaluation methods. Capturing the concept of power in rational decision-making is identified as the next challenge in IT evaluation research.