ASSESING IT PAYOFF:A CASE STUDY

Pertemuan 25-26

Matakuliah : A0814/Investment AnalysisTahun : 2009

Phase 1 : ExplorationStep 1. Identifyng the Investment Stage

Step 2. Match Approach and Techniques

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Phase 2 : InvolvementStep 3. Identify tangible and intangible metricsStep 4 and 5. Make business case for IT payoff

measurement and ensure customer involvement

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Phase 3 : AnalysisStep 6 : Conduct Analysis

Step 7 : Interpret data for constituents

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Phase 4 : CommunicationSteps 8 : Provide Feedback and Actionable Steps

Step 9 : Institutionalize bias for IT payoff measurement

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An Update• Resulting from the success of the payoff

measurement project, several new initiatives in measuring the value of strategic purchasing systems, contract evaluation, and impact of information systems to track medication errors.

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CaseThe strategic information sytsem (SIS) supports functions such as contract evaluation, quality management, process redesign, cost allocation, profitability analysis, and clinical treatment effectiveness analysis. The SISs are suported by data from operational financial and billing systems, combined by customer satisfaction and clinical outcomes. Continues investment in SIS has expanded existing functionality as well as added new data and there are proposals for further investment to add functionality and upgrade the technology platforms.

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Occasionally, the organization has been concerned about whether the benefits returned are worth the technology investment, not the least of which is whether or not they are using the tehcnology effectively. While reading an IT payoff article in a trade magazine, the SIS executive said to himself, “I don’t think we have ever tried to see what the technology is contributing to the organization’s bottom line.” He recalled that a manager had once proposed conducting a study, and that proposal was never given attention because the organization had never felt hte need to explore payoff issue?

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Why? The company had been operating at a 10% - 12 % profit margin, well above the industry average. The executive didn’t want to invest in spending time and effort when the bottom line demonstrated that we must have been doing something right! After all, the company’s SIS had been cited in the press as one of the best in the industry. So, why brother?

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At about the same time, another SIS professional notice the debatein academic circles about whether IT dose pay off? As the two SISexecutive were working on the proposal, the CIO reported thatrequests from the user community would require upgrades to thefunctionality as well as the technology platform for SIS.The CIO’s office, with assistance from other executives, prepared aproposal for enhanced functionality in the SIS. The first phase ofthe investment would go for software development and consultingServices. Because the technology was over a decade old, future sustained investment would be required for migrating thetechnology platform from mainframe computers to a web-enabledclient-server system iwth superior reporting capabilities.

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