IDEAS home Printed from https://ideas.repec.org/a/ete/revbec/20050407.html
   My bibliography  Save this article

IT Investment Decisions. Value, Uncertainty and Gut Feeling

Author

Listed:
  • R. Mercken

Abstract

Although IT investment evaluation has been one of the core subjects of IT research since the early days of the use of computers in business and a plethora of evaluation methodologies and taxonomies have been developed, there is little doubt that IT investment evaluation still is problematic and that many crucial decisions are based on gut feeling (belief) rather than on the result of analytical tools. Obviously, there is a limit to what can be evaluated by formal methods, but all too often the switch to non formal evaluation methods or no evaluation at all is made much too soon. It is argued that the main drivers for this switch are the high level of uncertainty surrounding those IT projects, the high risk of project failure and the intangible nature of many of the expected benefits. Being unable to quantify the expected return of the project, the decision is based on gut feeling. It is our purpose to try to reconcile analytical tools to belief on the basis of a shared notion of value.

Suggested Citation

  • R. Mercken, 2005. "IT Investment Decisions. Value, Uncertainty and Gut Feeling," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business, Review of Business and Economic Literature, vol. 0(4), pages 625-650.
  • Handle: RePEc:ete:revbec:20050407
    as

    Download full text from publisher

    File URL: http://feb.kuleuven.be/rebel/jaargangen/2001-2010/2005/TEM%202005-4/TEM_4_05_Mercken.pdf
    Download Restriction: no

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ete:revbec:20050407. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (library EBIB). General contact details of provider: http://edirc.repec.org/data/fekulbe.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.