Identifying Business Value Linkages for Information Technology: An Exploratory Application to Treasury Workstations

33 Pages Posted: 31 Oct 2008

See all articles by Robert J. Kauffman

Robert J. Kauffman

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

Charles H. Kriebel

Carnegie Mellon University - David A. Tepper School of Business

Date Written: April 1988

Abstract

Pervasive and costly automation of information handling activities continues to put pressure onsenior managers to quantify the contributions of information technology IT to the strategicgoals of the firm. This paper proposes the use of "business value linkage BVL" correlation teststo provide evidence that investments in IT create the desired higher order, economic impacts. Weargue that managers should carry out econometric tests which are specialized to capturingprimal, revenue-enhancing impacts, as opposed to dual, cost-reducing impacts. As an illustration,a sample BVL correlation test is constructed to quantify the impact of a "treasury workstation"system on a large commercial bank's ability to increase demand balances from corporate customers.We conclude with some thoughts about where BVL correlation will provide the bt resultsfor managers.

Suggested Citation

Kauffman, Robert J. and Kriebel, Charles H., Identifying Business Value Linkages for Information Technology: An Exploratory Application to Treasury Workstations (April 1988). NYU Working Paper No. IS-88-47, Available at SSRN: https://ssrn.com/abstract=1289716

Robert J. Kauffman (Contact Author)

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

Charles H. Kriebel

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

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