Economic Analysis & Business Decision-Making
Economic Analysis & Business Decision-Making
Justifying IT investment requires both quantitative economic analysis and strategic value assessment.
This section covers 9 topics.
Introduction to this section and its core frameworks.
The maximum value the next-best alternative would have provided, had a different choice been made — a concept that measures the true economic cost of a decision. In…
- ROI: A profitability metric expressing the ratio of gains to the cost invested.
- NPV (Net Present Value): The present value of the cash inflows an investment generates, minus the present value of its cash outflows.
A public investment decision-making method that monetizes the total costs of a public policy or project and the total benefits society as a whole receives from it,…
A decision-support analysis framework that systematically identifies and quantifies the total cost and expected benefits of an investment in an IT system, service, or…
An IT investment value-measurement framework developed by Forrester Research that includes Flexibility and Risk factors — which traditional ROI analysis tends to miss…
A technique that analyzes IT investment from the perspective of an integrated set of assets (a portfolio) rather than individual projects, allocating resources to…
A framework that applies financial option theory to real-asset investment decisions. In highly uncertain environments, it quantifies as option value the managerial…