A Return on Investment as a Metric for Evaluating Information Systems: Taxonomy and Application

Botchkarev, Alexei; Andru, Peter; Chiong, Raymond
January 2011
Interdisciplinary Journal of Information, Knowledge & Management;Jan2011, Vol. 6, p245
Academic Journal
Return on Investment (ROI) is one of the most popular performance measurement and evaluation metrics used in business analysis. ROI analysis (when applied correctly) is a powerful tool for evaluating existing information systems and making informed decisions on software acquisitions and other projects. Decades ago, ROI was conceived as a financial term and defined as a concept based on a rigorous and quantifiable analysis of financial returns and costs. At present, ROI has been widely recognized and accepted in business and financial management in the private and public sectors. Wide proliferation of the ROI method, though, has lead to the situation today where ROI is often experienced as a non-rigorous, amorphous bundle of mixed approaches, prone to the risks of inaccuracy and biased judgement. The main contribution of this study is in presenting a systematic view of ROI by identifying its key attributes and classifying ROI types by these attributes. ROI taxonomy has been developed and discussed, including traditional ROI extensions, virtualizations, and imitations. All ROI types are described through simple real life examples and business cases. Inherent limitations of ROI have been identified and advice is provided to keep ROI-based recommendations useful and meaningful. The paper is intended for researchers in information systems, technology solutions, and business management, and also for information specialists, project managers, program managers, technol-ogy directors, and information systems evaluators.


Related Articles

  • Differential Effects of the Two Types of Information Systems: A Hospital-Based Study. Menon, Nirup M.; Yaylacicegi, Ulku; Cezar, Asunur // Journal of Management Information Systems;Summer2009, Vol. 26 Issue 1, p297 

    A new empirical model for the production function of the hospital incorporating two types of information systems (IS) is developed. One type of IS is representative of information technology (IT) used in primary, clinical, value-chain activities, and the other is representative of the IT used in...

  • A Framework for governance of Post-Construction activities In IS development Projects (Case study in Egyptian environment). Abdelmoniem, Esmat M.; Mazen, Sherif A.; Hassanein, Ehab E. // International Journal of Computer Science Issues (IJCSI);Sep2012, Vol. 9 Issue 5, p393 

    Some of IS development projects have a bad reputation for going over budget and schedule, not realizing expectations and so providing poor return on investment. This research is designed to identify the main causes for IS development project failure at Post-construction phase, the technical and...

  • IT Project Portfolio Management: Modularity Problems in a Public Organization. Hansen, Lars Kristian; Mengiste, Shegaw Anagaw // IRIS: Selected Papers of the Information Systems Research Semina;2012, p159 

    As today's public and private sector organizations rely heavily on Information Technology (IT) to provide faster cycle times and better services, IT Project Portfolio Management (IT PPM) has become a high-priority issue. This research draws on Engaged scholarship to investigate IT PPM practices...

  • The Emergence of Online Plan Rooms. Jurewicz, John // EC&M Electrical Construction & Maintenance;Apr2002, Vol. 101 Issue 4, p24 

    Focuses on the emergence of online plan rooms in the U.S. Access to project documents; Role of reprographer in the technology; Increase of bidding efficiency.

  • IN PRAISE OF ROI. HEERKENS, GARY R. // PM Network;May2010, Vol. 24 Issue 5, p23 

    In this article the author discusses the use of return on investment (ROI) in the project management world. He says that any project that does generate a positive ROI should not be approved as projects are financial investments. He emphasizes that projects pursued by public-sector organizations...

  • Case Study: The North Bronx Healthcare Network. Kaplan, Dave // Speech Technology Magazine;Jan/Feb2004, Vol. 9 Issue 1, p56 

    Provides information on the advantage of the implementation of Misys CPRâ„¢ electronic patient record and CPOE system from Misys Healthcare Systems to the North Bronx Healthcare Network. Impact of its implementation; Improvements in the network's return on investment.

  • MAINTENANCE OF THE TREASURY'S ACCOUNTING CONSOLIDATED ACCOUNT SOLVENCY. Milojević, Ivan; Trandafilović, Saša // Proceedings of the IAE Scientific Meetings;12/1/2013, p314 

    Establishment of a rational management of assets made available to the users of public resources represents the basic task of the financial function of every accounting information system. Spending units realize their financial-accounting function through an unique consolidated treasury account,...

  • Enterprise Architecture in the Public Procurement of Information Systems. Lemmetti, Juha // IRIS: Selected Papers of the Information Systems Research Semina;2013, p23 

    Enterprise architecture (EA) can be used to bridge the gap between business and IT. In Finland, the Finnish public sector has adopted the EA as a methodology to create interoperable and efficient IT systems that enable and support the new ways of working needed to increase public sector...

  • Analysing public sector institutional capacity for health workforce governance in the South-East Asia region of WHO. Cometto, Giorgio; Nartey, Esther; Zapata, Tomas; Kanda, Mikiko; Md, Yunus; Narayan, Kavita; Pritasari, Kirana; Irufa, Aishath; Lamichhane, Ramkrishna; De Silva, Dileep; Noree, Thinakorn // Human Resources for Health;6/18/2019, Vol. 17 Issue 1, pN.PAG 

    Background: In order to analyse the institutional capacity for health workforce policy development and implementation in countries in the South-East Asia region, the WHO facilitated a cross-sectional analysis of functions performed, structure, personnel, management and information...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics