What is Business Value of IT

In recent years, a lot of research energy has been devoted to the planning and implementation process of electronic government (e-government) information systems and specifically the empirical derivation of success factors in e-government projects (e.g., Burn & Robins, 2003; Jaeger & Thompson, 2003; Becker et al., 2004; Mahrer & Brandtweiner, 2004; Scott et al., 2004 Gil-García & Pardo, 2005; Ni & Ho, 2005). However, with e-government initiatives slowly reaching higher stages of growth in many countries, research focus is shifting toward the assessment of what has already been achieved, and for public administrators the justification of substantial investments. To best reveal the key issues in investigating the economical success of e-government projects, this article draws on literature from information systems, investment valuation, organisation and public administration studies, as well as the authors’ experience with the economic evaluations of information technology (IT) investments in the public sector. The focus of this article lies on the discussion of findings and lessons learned from the economic evaluation (also termed valuation) of a large e-government portal, encompassing 62 applications developed between 2001 and 2005 at a German municipality. The valuation of this e-government portal is based on a framework that defines a standardised procedure model in order to enable both ex ante and ex post valuation of IT investments throughout the whole project lifecycle. This procedure model operates on a framework that can easily be adapted to different IT investment projects such as enterprise resource planning (ERP), supply chain management (SCM) or portal projects in general. The additional support by appropriate methods and tools enables the user to build up valuation routine in order to emphasise the valuation process itself.