What aspects are important in an ex-post investment evaluation?

Abstract

In academic research there seems to be great support for ex-post investment evaluations. The importance for organizations to learn from mistakes connected to IT/IS (Information Technology/Information Systems) investment projects and the opportunity to change the investment management process is stressed. Also it is suggested that in order to bring the investment to its best it is necessary to identify shortcomings and correct them. The fact that there is a huge variety of IT/IS investments further complicate the evaluation process. In this paper we have focused on enhancing our knowledge of ex-post investment evaluations. For that reason we have conducted in-depth interviews with mainly IT managers at middle-sized to large companies. By doing these interviews we have gained knowledge in, to which extent ex-post evaluations are done and what difficulties there are that might prevent companies from performing them. An understanding of which variables, intangible and tangible, that where perceived as important where achieved. The interviews showed that it is not common for IT managers to perform ex-post evaluations; this was thought by the respondents to take place at other levels in the company. A framework for ex-post evaluation should deal with aspects as: “Identification of investment gaps”, “impact on organization” and “organizational learning”. Difficulties experienced by respondents where e.g. “poorly performed investments proposals make it difficult or even impossible to know what to evaluate” and “lack of time and personnel”. It was also clear that mostly tangible variables where addressed, concerning time and money. The evaluation methods used by these companies where mainly financial connected to cost and income.