Overview

Our organization suffers from, first, a questionable level of understanding about IT in business management, and second, the perception that IT is just a cost not an opportunity.

IT Director, retail organization

We have found the most difficult question to answer is to measure the effectiveness and the long-term return on IT investment.

IT Director, health sector

So far, we have examined the issues giving rise to a need for evaluation, and some of the difficulties in implementing evaluation schemes. The two contributions here will be to introduce the lifecycle evaluation framework, and also a simple but powerful cost /contribution model that can be used to categorize, then manage IT investments. This chapter provides the background for later chapters, which offer more in-depth methods, tools and routes out of the evaluation challenges presented by IT and e-business.

2.1 Towards lifecycle evaluation

At the heart of one way forward for organizations is the notion of an IT evaluation and management cycle. A simplified diagrammatic representation of this is provided in Figure 2.1. Research by the authors in 1994, 1996, 1999 and 2000 found that few organizations actually operated evaluation and management practice in an integrated manner across systems' lifecycles. For example, our 1999 survey reported that only 32% of the responding organizations practised evaluation throughout the entire lifecycle of the investment. The evaluation cycle attempts to bring together a rich and diverse set of ideas, methods and practices that are to be found in the evaluation literature to date.

Figure 2.1: