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Investment in information technology needs to generate business value

What is business value?

‘What are the business-value returns from this ICT investment?’ is a frequently asked question of senior executives.

Information and communication technologies are major enablers of business, impact on most of an organisation and contribute to its overall success. Any investment in information technology needs to generate a return — known as a business value.

Given the changing nature of the Information and Communication Technologies (ICT) environment, businesses need to invest considerable resources to ensure their ICT infrastructure remains current.

Business model and business value

An organisation’s business model is the primary way an organisation generates its revenue and competes in its market.

An organisation’s business model therefore sets the context for understanding the business value returns. Any investments (including information technology investments) that are aligned (or ‘fit’) with the business model tend to be those that are considered valuable.

Your task

Think about a business you know that has made an IT investment. Describe this business and talk about how its IT investment contributes to its success.

Remember, you can ‘like’ comments if you agree with what’s been said or if you have found something particularly interesting. This is one way of giving feedback to your fellow learners. You can also ‘reply’ to other learners’ comments with your own views and opinions in order to have a more in-depth discussion.

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Competitive Advantage: Using Information to Build Business Success

Deakin University

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