TABLE OF CONTENTS After completing this chapter, you should be able to:
Explain what "benchmarking" is and how it can be implemented for information technology planning.
Explain what "gap analysis" is and how it can be used to identify and graphically display performance issues in information technology management.
Describe "game theory" as a means of selecting information technology investment alternatives.
Explain the difference between "pure strategy" and "mixed strategy" decision situations.
Explain the consequences of information technology alternative investment selections when a "game theory" problem has a "saddle point" solution.
In the previous part of this book we have presented a variety of financial and non-financial methodologies useful in information technology (IT) investment decision-making. In this first chapter of "Part IV. Other Information Technology Investment Methods" we look at a collection of procedures, guidelines and methodologies that have elements of both financial and non-financial methodologies. In this chapter we examine the comparative process of "benchmarking", which incorporates quantitative performance measure methodology but is itself a non-quantitative process for motivating improvements in IT and the organization as whole. We will also explore the use of "game theory" in IT investment decision-making. This methodology, while highly quantitative, is actually focused on behavior and can incorporate financial or non-financial information as a basis for decision-making.
When financial measures like, internal rate of return (IRR) or return on investment...
