Abstract
To determine the value of IT once it has been put into place and used, it is important to understand the context of the application of IT. Basically, the role of IT is to enable strategic change and improve business performance in several dimensions. IT enables the rapid delivery of top-quality, increasingly customized products and services, it supports organizations in meeting high standards in customer care, and it provides the means to compress design and development times in order to be the first to market. IT helps to launch new products more frequently, to explore and enter new markets faster, and to seek new distribution channels. All of these dimensions can give companies a powerful competitive edge, and IT is increasingly woven into them. IT does not stand on its own but contributes to realizing business objectives in today’s competitive, often global environment. To determine the value of IT once it has been put into place and used, it is important to first understand the context of the application of IT since it does not stand on its own but rather contributes to realizing business objectives. The first part of this chapter provides a review of the evolution of the role and application of IT, leading to its role in today’s information-based organization. Secondly, it is obvious that the best value from IT is gained if the “right” investment decisions for IT are made. To make the right decisions about IT in the context of business objectives, organizations need to carry out some form of IT planning. Planning-for-success is therefore the second main subject of this chapter. The evolution of IT planning practices is briefly described, leading to the most important attributes of contemporary, effective IT planning approaches. Finally, the chapter links the distinct roles of IT with the planning and valuation approaches for IT investments in relation to their business purpose.