Simon Bourdeau (UQAM and CIRANO), Pierre Hadaya (UQAM), and Philippe Marchildon (UQAM) have published on April 10th 2018 a new CIRANO study on the measure of benefits of projects in information technology.

Nowadays, the majority of organizations, whether they are big or small, private or public, in the manufacturing or services sectors, are compelled to invest in information technologies (TI) to develop and maintain their competitive edge. In Canada, investments in TI were estimated at 2000 to 5000$ per employee per year. Organizations often collide with the « TI paradox », meaning that they invest in IT whose power and performance continuously grows, as the increase in the productivity associated with its use on individual, organizational and national level is rather weak and difficult to evaluate.

In order to help organizations in this important challenge, the authors have presented the main elements of their findings during a CIRANO lunch seminar on April 10, 2018, which allowed bringing some elements of answers to the different questions below:

• What are the organizational benefits fostered by investments in IT?
• What are the key performance indicators allowing to measure the benefits within the organizations?
• What are the challenges associated with the identification and the management of the benefits tied to investment in IT?

Study’s predominant facts

• The synthesis of all gathered writings (total of 112) shows that there does not seem to be a unique and universal way of defining the benefits of IT, how they can be classified and how the level of reached benefits can be measured. The existing multitude of taxonomie to characterize the benefits of IT projects renders their identification sometimes laborious.
• In order to help managers in synthesizing and interpreting the IT benefits, the authors propose a classifying scale where each IT benefit is classified within 3 dimensions: 1) the effect of the benefit; 2) the targeted activity type; 3) the nature of the impact (strategic, tactic or operational).
• It is important to remember that it is not the IT in itself that will generate the desired IT benefits but rather the organizational transformations/changes supported by the new implanted IT.
• In order to increase the chances of real benefits from an IT project, the whole endeavouring community would be wise to follow the five principles identified by the authors:
  1. The It has no inherent value;
  2. The real benefits stem from a better use of information;
  3. It is the beneficiaries of IT, and not the project’s delivery people, that will allow the material conversion of benefits of IT projects;
  4. All IT projects issue results, but not all IT projects will necessarily issue benefits.
  5. It is essential that IT projects benefits be actively managed.

This group of elements confirms the importance of having a tight management of benefits while undergoing a project of investment in IT.

In conclusion, in order to have the expected benefits benefits, it is  important to put in place practices that will increase the probability of higher benefits from an IT project.

See the Full Report