Opportunities to realize benefits of IT investments: A case study of a shared service center at Atlas Copco

Abstract

Background and Problem: A large proportion of firms’ investments consist of information technology (IT) investments. The direct benefits of IT investments are best captured at the process level and to achieve business value, strategic alignment between business and IT is needed. Statistics show that to control IT investments is not an easy task. IT is complex, it is more than a tool deployed, it is an ensemble of techniques applications and people in their social context. These issues embrace the importance of firms’ ability to manage IT resources, which refers to IT capabilities. Research proved the importance of having IT capabilities to generate return and to realize the value of IT investments. Management control systems (MCS) can be used to create strategic alignment, and the design of an MCS depends on several contingency factors. The strategy map based on balanced scorecard is a cybernetic control framework that emphasizes strategic alignment with a multidimensional approach. The framework aims to translate the strategy into objectives within four critical perspectives to visualize the strategic alignment. Further, not only the strategic alignment but also the strategic emphasis is suggested to have an impact on the business value of IT. Aim of the Study: The aim of this study is to investigate how multidimensional cybernetic control systems can support realization of benefits from IT investments by combining management accounting (MA) and information systems (IS) research. Methodology: This thesis is based on a single case study of an accounts payable shared service center, which has invested in IT aiming to improve the invoice handling process. Data was gathered from primary and secondary sources and was analyzed through pattern matching. An ensemble view of the IT was adopted. Discussion and Conclusion: The thesis discusses how a multidimensional cybernetic control system can be supportive in capturing the complexity of IT investments to enable strategic alignment. Additionally the benefits of adopting dual emphasis are discussed. The conclusion articulates the usefulness of a multidimensional cybernetic control system to improve the strategic alignment and enable dual strategic emphasis and in turn realize the benefits of IT investments. Further, it provides evidence of the advantages to combine IS and MA research.