Quantifying the Business Value of Information Technology: An Illustration of the 'Business Value Linkage' Framework

38 Pages Posted: 31 Oct 2008

See all articles by Rajiv D. Banker

Rajiv D. Banker

Temple University - Department of Accounting

Robert J. Kauffman

Singapore Management University; Singapore Management University - School of Information Systems

Date Written: August 1991

Abstract

Senior management's ability to gauge the business value of investments in information technology (IT) hasbeen seriously hampered by a lack of analytic tools to conduct sound performance assessment. In thispaper, we present a conceptual framework called a "business value linkage" that is used to represent theprocesses by which the direct outputs of an IT are transformed within the firm and its operatingenvironment into enhanced revenues, reduced costs and new strategic opportunities to increase marketshare. Utilizing appropriate modeling and econometric methods, we illustrate our approach by analyzingseveral hard-to-measure aspects of the business value of automated teller machines (ATMs) in retailelectronic banking. The results show that the hardest to measure impacts in some cases can have thegreatest business value.

Keywords: Automated teller machines, ATMs, banking, business value, business value linkage, electronic banking, electronic funds transfer, EFT, information technology investment, IT investments, investment evaluation, retail payment systems, strategic information systems

Suggested Citation

Banker, Rajiv D. and Kauffman, Robert J., Quantifying the Business Value of Information Technology: An Illustration of the 'Business Value Linkage' Framework (August 1991). Information Systems Working Papers Series, Vol. , pp. -, 1991. Available at SSRN: https://ssrn.com/abstract=1289044

Rajiv D. Banker (Contact Author)

Temple University - Department of Accounting ( email )

Philadelphia, PA 19122
United States

Robert J. Kauffman

Singapore Management University ( email )

Li Ka Shing Library
70 Stamford Road
Singapore 178901, 178899
Singapore
65-6828-929 (Phone)

Singapore Management University - School of Information Systems ( email )

80 Stamford Road
Singapore, 178902
Singapore

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