Many information technology projects fail to realise their predicted benefits. Selecting the right information technology projects to proceed with can be an important factor in an organisation's profitability and success. This research reports the findings of an empirical study which examines the methods used by organisations in making information technology investment decisions, and seeks to provide some insight into the relationships between the evaluation method and various project characteristics.
The sample evidence, gathered through a survey of government and private organisations throughout Queensland suggests that, overall, non-economic methods are more important in the evaluation of information technology investment proposals, than economic approaches, although a mixture of both economic and non-economic measures is generally applied. Support for business objectives, and support for management objectives are considered the most important decision criteria in the evaluation of information technology projects. The results of the survey suggest that investment size, and investment type make no difference to the choice of evaluation method used in assessing information technology proposals.
Further insight into the basis upon which investment decisions are made, is required. Moreover, the development and testing of hypotheses regarding the best practical approach to be applied to various investment situations is also an important research question for information technology professionals. Improvements in the techniques applied to information technology investment decisions should result in an improvement in the decision making process, and lead to a more effective and efficient use of information technology resources.