A new study from the Massachusetts Institute of Technology, Information Systems Research, and other shows that successful companies are revolutionizing the way IT investments will get solved. Investment is not justified only on the basis of a functional silo more profitable. Today, the strategic needs of the company as a whole in the first place. In the last 15 years, writes Professor Joan Ross Sloan School at MIT and Cynthia Beath management from the University of Texas, the tidal wave of IT-supported initiatives have increased the importance of investing strategically. Internet only created numerous opportunities: reengineering, implementing online products and services, approach, new customer segments, and repeat business model. The possibilities seem limitless, but the resources - capital, IT professionals, management focus, and the potential for change - not. How to choose? Traditionally, the company justified the project, provided a strong case for business. But with its growing strategic importance, companies now have to weigh against the claim of the individual transformation organizationwide opportunities - and should assess the potential to attract and improve existing systems and infrastructure to create new opportunities and test new business models. The authors recommend a new approach based on a framework of investment they developed following a review of e-business initiatives and support of IT investments by 30 companies. The framework calls the simultaneous investment in four kinds of IT initiatives. Converting investment is needed if the core infrastructure of the company limits its ability to develop applications critical to long term success. Upgrading infrastructure investments support the functionality and cost effectiveness. Process improvements allow business applications to use the infrastructure, providing short-term profitability. Experiments provide opportunities to learn about and test the capabilities of new technologies. "Hide
by Jeanne W. Ross, Cynthia M. Beath Source: MIT Sloan Management Review 11 pages. Publication Date: December 1, 2002. Prod. #: SMR075-PDF-ENG
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