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Extra info for 2008 Schweser QuickSheet: Critical Concepts for Exam Success. Level 2

Example text

Does the appraisal process consider the implications of business changes? Do people making decisions understand the business cases? What % of projects deliver the benefits that justified the investment? Yes No 55% 45% 22% 30% 78% 70% 10% 90% 25% 27% 75% 73% 30 The Challenge of IS/IT Investments areas of the business that are most important to the organization, for example customer care or employee satisfaction. The dominance of a financial mindset within the investment appraisal process will tend to favour cost cutting or efficiency projects, which although worthwhile, should not be allowed to exclude projects that will improve effectiveness or innovation within the organization.

Developing a reputation for successful innovation is key to many consumer markets, since growing revenues increasingly depend on such innovations. Maintaining such a reputation is important, since studies have shown that consumers are more ready to accept new services from proven innovators. Management Benefits Farbey et al. 2 to describe the activities of middle managers within the organization. These individuals operate at a business unit level and are often tasked with the collection and sharing of information, together with decision making based on that information, often about the most appropriate use of resources and are also responsible for the development of their staff.

Examples of such benefits would be the revenue generated by the launch of a new e-commerce website or the cost savings caused by discontinuing the licences to certain software packages. These benefits can easily be Emergent Benefits 21 measured and in both of these cases the unit of measurement could be financial. Such benefits are often termed ‘hard’, as opposed to the ‘soft’ benefits discussed later and many organizations concentrate their consideration of new IS/IT investments solely on such hard benefits.

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2008 Schweser QuickSheet: Critical Concepts for Exam Success. Level 2


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