ASSESING IT PAYOFF: A CASE STUDY Pertemuan Matakuliah: A0814/Investment Analysis Tahun: 2009

Phase 1 : Exploration Step 1. Identifyng the Investment Stage Step 2. Match Approach and Techniques Bina Nusantara University 3

Phase 2 : Involvement Step 3. Identify tangible and intangible metrics Step 4 and 5. Make business case for IT payoff measurement and ensure customer involvement Bina Nusantara University 4

Phase 3 : Analysis Step 6 : Conduct Analysis Step 7 : Interpret data for constituents Bina Nusantara University 5

Phase 4 : Communication Steps 8 : Provide Feedback and Actionable Steps Step 9 : Institutionalize bias for IT payoff measurement Bina Nusantara University 6

An Update Resulting from the success of the payoff measurement project, several new initiatives in measuring the value of strategic purchasing systems, contract evaluation, and impact of information systems to track medication errors. Bina Nusantara University 7

Case The strategic information sytsem (SIS) supports functions such as contract evaluation, quality management, process redesign, cost allocation, profitability analysis, and clinical treatment effectiveness analysis. The SISs are suported by data from operational financial and billing systems, combined by customer satisfaction and clinical outcomes. Continues investment in SIS has expanded existing functionality as well as added new data and there are proposals for further investment to add functionality and upgrade the technology platforms. Bina Nusantara University 8

Occasionally, the organization has been concerned about whether the benefits returned are worth the technology investment, not the least of which is whether or not they are using the tehcnology effectively. While reading an IT payoff article in a trade magazine, the SIS executive said to himself, “I don’t think we have ever tried to see what the technology is contributing to the organization’s bottom line.” He recalled that a manager had once proposed conducting a study, and that proposal was never given attention because the organization had never felt hte need to explore payoff issue? Bina Nusantara University 9

Why? The company had been operating at a 10% - 12 % profit margin, well above the industry average. The executive didn’t want to invest in spending time and effort when the bottom line demonstrated that we must have been doing something right! After all, the company’s SIS had been cited in the press as one of the best in the industry. So, why brother? Bina Nusantara University 10

At about the same time, another SIS professional notice the debate in academic circles about whether IT dose pay off? As the two SIS executive were working on the proposal, the CIO reported that requests from the user community would require upgrades to the functionality as well as the technology platform for SIS. The CIO’s office, with assistance from other executives, prepared a proposal for enhanced functionality in the SIS. The first phase of the investment would go for software development and consulting Services. Because the technology was over a decade old, future sustained investment would be required for migrating the technology platform from mainframe computers to a web-enabled client-server system iwth superior reporting capabilities. Bina Nusantara University 11