SAAS: Integrating Systems Analysis with Accounting and Strategy for Ex Ante Evaluation of IS Investments

Akhilesh Bajaj
The University of Tulsa

Waray E. Bradley
The University of Tulsa

Karen S. Cravens
The University of Tulsa

ABSTRACT:

For many companies, investment in information systems (IS) is one of the largest expenditures in the firm’s capital budget. An important goal of ex ante investment evaluation of an information system (IS) is to reasonably determine the return on investment (ROI) of the proposed information system. However, past research has shown that business managers have significant concerns about the soundness of ex ante ROI evaluations of information systems. This relates to the fact that several benefits of an IS are intangible and non-financial. In addition, it has long been recognized that, unlike many other capital projects, IS projects exhibit significant contextual interaction. Further, different professionals such as accountants and IT personnel often use different approaches to evaluate a potential information system.
            This study develops a framework and methodology that integrates and accommodates the different perspectives of IT personnel, accountants, and business managers. We propose a flexible ex ante framework and methodology that integrates systems analysis, accounting and strategy (SAAS). The framework evaluates financial and non-financial factors and uses analyses that consider investment approaches used by both IT and accounting personnel. The framework is evaluated in two different organizations and recommendations are made for both future research in this area and for the applied use of the framework by professionals.

KEYWORDS: Information technology investment evaluation, system analysis, information system business value.