Economic Efficiency Analysis for Information Technology in Developing Countries (original) (raw)

The Challenges of Applying Cost Benefit Analysis to IT in Developing Countries

Investing in Information Technology (IT) has been considered a risky venture by the administrations of many developing countries. The high cost of IT, the lack of financial and technical resources, and the high rate of failure of many public-sector information systems are only few of the negative factors affecting top-level administration decisions regarding IT projects. However, applying an efficient and a systematic approach for cost-benefit analysis to IT projects can reduce the uncertainty and the risk involved. Unfortunately, experience shows that the application of such an important tool can be a difficult task which requires overcoming many problems and challenges present in the public sector. This paper presents the application of CBA from a practical point of view, while focusing on identifying the sources of difficulties present in the public sector of developing countries.

Optimization of IS/IT Investment using the Cost-Benefit Analysis (CBA) Method in Government Agencies

Jurnal IPTEK

In improving its services to the public, Badan Pengelolaan Keuangan dan Pajak Daerah (BPKPD) requires investment in information systems (IS) and information technology (IT) to support the governance. Therefore, IT investment must be implemented well and with full consideration, because IS/IT investments, if allocated appropriately, can support the organization in implementing its business strategy. Based on problems experienced by BPKPD such as IT investment that is not in accordance with business needs and project management that is not well managed, then BPKPD must be observant in determining the feasibility of a project before investing. Researchers use two methods, Ward and Peppard to analyze strategic planning that produces what investments are needed and using Cost-Benefit Analysis (CBA) to find out whether investments are profitable or detrimental and to choose which investments are worth prioritizing. The results of this study are to produce an investment proposal consist of: 5 IS proposals, 1 IT proposal and 2 IS/IT Management proposals. Eight investment proposals obtained from the Ward and Peppar analysis, after analyzing their feasibility using the CBA method, it produced 1 IT investment proposal that was unfeasible.

Information Technology Investment Benefit Analysis Using the Cost Benefit Analysis Method and Ranti's Generic IS/IT Business Value Method

JIIP - Jurnal Ilmiah Ilmu Pendidikan

The rapid development of technology affects society. The development of information technology affects the business world today. To overcome all this, companies need breakthroughs by utilizing technology, namely e-commerce. Every organization or company needs to make information technology investments to be able to ensure better performance. The purpose of this study is to find out the benefits resulting from the investment in information technology in the form of online shopping applications by one fashion retail company in Indonesia, namely PT. XYZ. Information technology investment calculation methods used in this study are the financial statement comparison analysis method, Ranti's generic IS/IT business value method, and the cost-benefit analysis method. Through calculations that have been carried out using Ranti's generic IS/IT business value method and the cost-benefit analysis method, it has been determined that the information technology investment is beneficial fo...

Assessing IT-investments: costs, benefits, risks

2000

Many methods aimed at cost-benefit analysis for IT-projects can be found in literature. These all have one thing in common: actual usage is limited. In our view this is due to two factors: the criteria to take into account in the analysis are fixed and the process to support the analysis is lacking or at least flawed. In this paper an approach towards costbenefit analysis will be described that explicitly takes account of these two factors. First, a framework to support the identification of locally relevant criteria will be described. Secondly, a process to support the analysis that takes into account human factors is presented. Some results from practice will be presented to illustrate the approach.

Cost Management for Information and Communication Technology Projects

Journal of Engineering, Project, and Production Management, 2022

Information and communication technology (ICT) is an important sector that contributes to the development of a country. However, the success of this sector depends on the success of the ICT projects. Hence, ICT projects must be managed efficiently and effectively to ensure that they are successfully implemented. The literature review reveals that most of the ICT projects around the globe are in a challenged state, especially in terms of cost. This quantitative research aims to explore the cost influencing factors of the ICT projects in Malaysia and to build a cost influencing factors framework as a knowledge base for project managers. A 5-point Likert scale survey was conducted using the purposive sampling and the snowball sampling method to solicit responses from a large population of ICT project managers. The responses of 194 ICT project managers in Malaysia were analyzed, and the top 15 cost influencing factors were identified at different phases of a project. This result was use...

Factors critical to benefits realisation of IT/IS projects in the South African government

2018

Purpose-This research investigated factors critical to benefits realisation of IT/IS project in the South African Government. The aim of the research was therefore to establish a list of factors critical to benefits realisation of IT/IS projects in SA government by testing the applicability of Coombs (2015) factors and as well as testing factors identified in the literature. Method-In addition to the factors identified in Coombs (2015) study, a literature review was conducted to identify additional factors critical for benefits realisation in IT/IS projects and twenty-one factors were identified. A web-survey with twenty one (21) success factors was sent to IT stakeholders in SA government particularly the State Information Technology Agency to determine their relevance and importance in benefits realisation of IT/IS projects in SA government. Results-The research finding revealed that all four of Coombs (2015) study success factors were relevant. Two of the factors were amongst the top ten factors considered the most important factors rated by the IT stakeholders in SA government. It also revealed that all twenty-one factors were relevant, however the following ten (10) factors were

Analyzing the Driving Affecting Factors on Investment Efficiency on IT Projects

2013

The purpose of writing this paper is to identify, analyze and categorize the driving affecting factors on IT investment efficiency. For the purpose, 2 separated questionnaires by the same main questions were designed. The driving affecting factors include “overall questionnaire”, “intangible variables”, “financial requirements”, “nonfinancial requirements”, “strategic requirements”, “tactical requirements” and “operational requirements”. The results of applying Chi-Square test show that there are positive and meaningful correlations between the variables above and investment efficiency on IT. Also Binomial test was used to survey the variables levels in which all of them were placed in favorable levels. Finally the results of utilizing fuzzy TOPSIS technique show that “work time”, “job enrichment” and “competitive

Comparative Study from Several Business Cases and Methodologies for ICT Project Evaluation

International Journal of Advanced Computer Science and Applications, 2016

Achieving high competitive advantage through Information and Communication Technologies (ICT) has never been easy without proper management and appropriate utilization of ICT resources. Therefore, the statistics suggested that ICT project failures are very common in the organization due to several reasons; it fails to deliver the required objectives of investment, inaccurate budget planning, lack of risk management plan and time overrun are some basic reasons for an ICT project's failure. To overcome these issues, recently ICT decision makers are emphasizing more on ICT project's evaluation rather than investment. The practitioner broadly categorized the evaluation techniques in post and pre evaluation methods, which is further divided into measuring the return from financial and non-financial perspectives. The main purpose of this paper is to provide a comparative analysis on ICT investment's evaluation, their categories based on pre and post evaluation. Thus, the paper offers an extensive literature review that can help ICT decision makers and organizations to better select the evaluation techniques available, where integration of multiple techniques can further improve this process.

Information technology project evaluation: An integrated data envelopment analysis and balanced scorecard approach

Expert Systems with Applications, 2010

Information technology (IT) is a tool crucial for enterprises to achieve a competitive advantage and organizational innovation. A critical aspect of IT management is the decision whereby the best set of IT projects is selected from many competing proposals. The optimal selection process is a significant strategic resource allocation decision that can engage an organization in substantial long-term commitments. However, making such decisions is difficult because there are lots of quantitative and qualitative factors to be considered in evaluation process. This paper has two main contributions. Firstly, it combines two well-established managerial methodologies, balanced scorecard (BSC) and data envelopment analysis (DEA), and proposes a new approach for IT project selection. This approach uses BSC as a comprehensive framework for defining IT projects evaluation criteria and uses DEA as a nonparametric technique for ranking IT projects. Secondly, this paper introduces a new integrated DEA model which identifies most efficient IT project by considering cardinal and ordinal data. Applicability of proposed approach is illustrated by using real world data of Iran Ministry of Science, Research and Technology.

A model for evaluating efficiency - an application in information technology and systems investments

Pesquisa Operacional, 2012

Despite being widely applied in real problems that tackle evaluating efficiency, Data Envelopment Analysis (DEA) models are frequently criticized on account of the weights of evaluation criteria often being defined loosely. Thus, approaches to incorporating value judgments in DEA models have been used in order to obtain more consistent results with managerial reality. It is against this background that this paper proposes a DEA model for evaluating efficiency, where the value judgments of those responsible for evaluation, regarding the criteria, are defined based on the philosophy of the SMARTS method and incorporated into the model by the Assurance Region (AR) method. The model proposed is applied using information about the investments made in the area of Information Technology and Information Systems by Brazilian banks The aim is to exemplify the application of the model and raise points for discussion with regard to its merits.