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IT Payoff, The: Measuring the Business Value of Information Technology Investments by Rajiv Kohli, Sarv Devaraj

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Chapter 5. A ProcessPerspective

Mismeasurement of the IT payoff is often seen as one of the culprits for spawning the productivity paradox. Experts believe that many payoff studies have used inappropriate measures or applied blunt tools to measure the impact of IT. Our own analysis indicates that there is great diversity of measurement tools applied in past IT payoff studies. [1]

The issue of (mis)measurement breaks down into two primary camps. First, those who believe that the payoff from IT investment should be measured by the change in the outcome, such as higher sales, greater market share, or reduced costs. This is called the variance approach. In the second approach, called the process approach, IT investment is measured through the process ...

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