IT/IS Investment Justification : An Interpretivist Case Study

Zahir Irani

Department of Information Systems and Computing, Brunel University

Uxbridge, Middlesex, UB8 3PH, Great Britain.

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MRPII 20

Abstract

The Justification of Information Technology (IT) and Information Systems (IS) is inherently complex, since there are a large range of benefits that are intangible and non-financial.

However, it is not only the benefits of IT/IS that present this difficulty but also the range of indirect costs associated with an IT/IS deployment. Therefore, many justification processes are exclusively based on those financially tangible benefits and costs that can be accounted for within traditional appraisal techniques.

This paper describes the evaluation of IT/IS in manufacturing, with a particular focus on Manufacturing Resource Planning (MRPII). The case description presents a small/medium enterprise (SME) that was unable to 'fully' justify its capital expenditure on MRPII, whilst using traditional approaches to financial appraisal.

As a result, the company adopted a simple cost/benefit analysis, and invested as an 'act of faith'. The author describes the idiosyncrasies of the case study company, and details the problems experienced during their attempts to evaluate, implement and realise the

holistic implications of their MRPII investment.