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Abstract

For a company, capital investment of any sort is weighed up before a decision is made to invest. It is. true that the vast majority of investments for companies can be quantified financially. Investment in Iriformation Technology (IT) and Information Systems (IS) however has proved more complex than other investments as there are ·a large amount of intangible and non-financial benefits associated with this area of expenditure. Investments are traditionally rationalised by outweighing the costs and the benefits. The indirect costs associated with the deployment of IT/IS are equally difficult to put a measure on and hence the traditional methods of appraising IT/IS investments have proved to be inappropriate in this capacity. This paper details the lack of commitment by companies to fully justify their investment in IT/IS due to the apparent problems associated with measuring costs and benefits. After researching the areas of costs, benefits, risks, valuation and evaluation techniques, this paper provides a new framework for justifying investment in IT/IS. The framework proposes extensions to the current processes used by decision makers when justifying investment in IT/IS and may provide an additional tool to justify investment more accurately in this area.

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