@ARTICLE{26583204_138191895_2014, 
	author = {Nina Korovkina and Maria Fay}, 
	keywords = {, information technologies (IT), investments, project feasibility, IT value, IT projects portfolio, business driverIT efficiency},
	title = {<p class="text">Justification of IT investments based on business drivers tree&nbsp;</p>},
	journal = {},
	year = {2014},
	number = {3 (29)},
	pages = {57-68},
	url = {https://bijournal.hse.ru/en/2014--3 (29)/138191895.html},
	publisher = {},
	abstract = {Nina L. Korovkina -&nbsp;Associate Professor, Department of Corporate Information Systems,&nbsp;Faculty of Business Informatics,&nbsp;National Research University Higher School of Economics.&nbsp;Address: 20, Myasnitskaya Street, Moscow, 101000, Russian Federation.E-mail: nkorovkina@hse.ruMaria S. Fay -&nbsp;Student, Hasso-Plattner-Institut f&uuml;r Softwaresystemtechnik, School of design thinkingAddress: 2-3, Prof.-Dr.-Helmert-Str., Potsdam, D-14482, Germany.E-mail: msfay@edu.hse.ru&nbsp; &nbsp; &nbsp; This article presents an approach to developing a methodology for IT project investment feasibility through establishing a link to company business drivers. Representing the factors enhancing the company value, business drivers enable to identify how strategic benefits from IT project implementation influence enterprise performance indicators. A business driver tree is based on the ValIT model, displacing the hierarchy of several financial factors that increase economic value added and being complemented by several industry- and company-specific nonfinancial factors, such as "internal optimization" and "ability to innovate". Thus an underlying basis is provided to evaluate strategic feasibility of project investment.&nbsp; &nbsp; &nbsp;Such method of formulating potential benefits from information technologies (IT) in business terms is regarded as a criterion for investment decision-making and complements the Value-Based Management concept. The paper argues that in a number of cases the adequate level of company business drivers coverage by a project can compensate for the negative value of expected financial benefits. The analysis of IT investment feasibility opportunities enables to build a decision-making matrix based on risk assessment, quantitative indicators and alignment with company priorities. Implementation of the recommendations formulated in the paper is intended to ensure a higher return on IT investments (and their transparency) and to achieve harmonization of business and IT. It also enables to take into account business specifics and to carry out a more comprehensive appraisal of IT investment-related effects that mitigates the risk of inaccurate cash flow estimation. The proposed approach has been successfully tested in assessment of a potential IT projects portfolio at a large Russian manufacturing company.},
	annote = {Nina L. Korovkina -&nbsp;Associate Professor, Department of Corporate Information Systems,&nbsp;Faculty of Business Informatics,&nbsp;National Research University Higher School of Economics.&nbsp;Address: 20, Myasnitskaya Street, Moscow, 101000, Russian Federation.E-mail: nkorovkina@hse.ruMaria S. Fay -&nbsp;Student, Hasso-Plattner-Institut f&uuml;r Softwaresystemtechnik, School of design thinkingAddress: 2-3, Prof.-Dr.-Helmert-Str., Potsdam, D-14482, Germany.E-mail: msfay@edu.hse.ru&nbsp; &nbsp; &nbsp; This article presents an approach to developing a methodology for IT project investment feasibility through establishing a link to company business drivers. Representing the factors enhancing the company value, business drivers enable to identify how strategic benefits from IT project implementation influence enterprise performance indicators. A business driver tree is based on the ValIT model, displacing the hierarchy of several financial factors that increase economic value added and being complemented by several industry- and company-specific nonfinancial factors, such as "internal optimization" and "ability to innovate". Thus an underlying basis is provided to evaluate strategic feasibility of project investment.&nbsp; &nbsp; &nbsp;Such method of formulating potential benefits from information technologies (IT) in business terms is regarded as a criterion for investment decision-making and complements the Value-Based Management concept. The paper argues that in a number of cases the adequate level of company business drivers coverage by a project can compensate for the negative value of expected financial benefits. The analysis of IT investment feasibility opportunities enables to build a decision-making matrix based on risk assessment, quantitative indicators and alignment with company priorities. Implementation of the recommendations formulated in the paper is intended to ensure a higher return on IT investments (and their transparency) and to achieve harmonization of business and IT. It also enables to take into account business specifics and to carry out a more comprehensive appraisal of IT investment-related effects that mitigates the risk of inaccurate cash flow estimation. The proposed approach has been successfully tested in assessment of a potential IT projects portfolio at a large Russian manufacturing company.}
}