INVESTMENT BACKGROUND
Investment can be defined as putting resources such as time, money and effort into a particular subject or object so as benefit or acquire profits. Information technology on the other hand incorporates use of computers, mass storage and any other devices in processing and securing forms of electronic data or information. Information technology investment therefore incorporates placement of resources such as money, effort, time and any other resources into the betterment of the management information system so as to generate profit or any other benefits.
Investing in IT
IT is a fast changing aspect of technology, thereby adding …show more content…
When the version finally comes out, IT being a rapidly changing element, another advanced version starts being assembled which in turn leads to an organization further postponing its investment. Managers choosing or making a decision to use the currently available IT technology in the organization at a very hefty cost and soon realizing that the technology they have used has or is soon to be obsolete.
Hence in we get to see that when it comes to investing in information technology, the managers are required to be competent and IT enabled so as to make keen and strategic decisions. Today no industry or business can survive in the global market without having the latest IT technology, since such technology is a major driving force behind production globalization and it is also a tool that a business to …show more content…
If the IT investment has a short payback period then it is more viable.
Information economics; this type of information technology investment incorporates the calculation of the total value of the IT investment, based on a enhanced return on investment by the organization.
Balanced scorecard; this type of information technology investment incorporates assessing and evaluating the value of the IT investment from different perspectives in the organization, namely the business perspective, users or consumers perspective, learning perspective and the financial perspective so as to determine whether the investment is viable or not.
Decision theory; this type of information technology investment incorporates calculation or estimation of the expected value of investing in another investment and comparing it with the one at hand, that is the information technology investment.
Benefits of IT investment
This incorporates the benefits that the organization accrues on establishment of the IT technology and it is mainly focused on the investment versus the