Understanding Business Benefit Management - Research Proposal Example

? Understanding Business Benefit Management: Towards an iterative framework for Realizing and Measuring business value of technology investments Introduction 1.1 Background Benefits management deals with managing and delivering actual IS/IT benefits to an organisation (Van Grembergen, 2001). It is concerned with defining or articulating the extent of the anticipated benefits and the major beneficiary stakeholder groups, alongside the timescales for realising these benefits (Sofroniou, 2004). Effective implementation of IT management and adept utilisation of its capabilities are taking an integral stance to improve business performance. It means that business managers must not only necessarily decide on IS/IT projects and priorities, but also on delivering benefits. This is so because inability to realise the benefits of specific IT investments leads to reduced organisational understanding of the business value that can be provided by IT, which then results in the lack of consistency of investment choices. In turn, this leads to limitation or inability of identifying the means through which IT can be best utilised as a tool to improve performance or support new strategies (Ward and Daniel, 2012). Benefits management approaches take pride in managing the achievement of benefits. However, they have few explicit means to link these processes to existing decision making, which further investments require for modifications. Thus, it is necessary to integrate evaluation and benefits management together into a seamless approach with regard to IT in organisations (Van Grembergen, 2001, p. 49). Benefits management identifies potential benefits, planning, modeling, assigning responsibilities, and realising them as a result of investing in business change. Its central focus is the determination of potential benefits. It is commonly carried out as a key aspect of programme management; otherwise, it must function in the framework of a management methodology. It also interlaces with performance management, where it enables achievement of outcomes (Sofroniou, 2004). 1.2 Research Statement Understanding business benefit management and integrating this important process in the enterprise investment portfolio management guarantees that an organization achieves her technology innovation/project objectives. 1.3 Research Objectives This research is centered on answering two questions confronting current organisations, which are: (1) To determine if there is realisation of anticipated economic benefits of investments in information technology. (2) To provide a framework for ensuring that the above takes place. 2. Literature Review Pepperd, Ward, and Daniel (2007) provide a good insight for understanding business benefits management through their discussion of the subject from investments in information technology. They claim that most organisations are engaged in implementing IT technology rather than realising the expected business benefits of this technology. This results in non-realisation of benefits despite the technical success of a project. The authors present an approach to identify, plan, and manage the delivery of benefits. The benefits management approach thus constructed starts with a task requiring business managers and IT professionals to answer a set of questions about a potential IT investment. Important areas of investment are purported to be answered by these questions, namely: improvements in target performance, the ways in which the business can function differently, and enabling IT capabilities (Pepperd et al., 2007). Money and Twite (1995) posit that a reason for the importance provided to IT benefits management is the increasing level IT expenditure in most organisations. There is insistence on the part of top management that increased attention be given to the economic aspect of information systems (IS), thereby leading to an enormous demand for a comprehensive metric for information technology. However, only little attention has been provided to creating a suitable approach to understanding the economics of using information in boosting the efficiency of organisations. Such framework is provided by the Effective Measurement and Management of IT Costs where economic issues are better understood and suggestions for appraising IT efforts are integrated. Moreover, there is substantial growth in IS and technology investments in organisations. Whilst organisations generally use formal methodologies and techniques to compute investments, there is hoverer less formality applied to managing and realising these benefits. Using Australian organisations in investigating IS/IT benefits, certain issues are revealed in terms of benefits identification and structure, benefits realisation planning, delivery and evaluation of these benefits, and review. Some value in using formal methodologies is shown in the results, but there is lack of uniformity in such formality (Lin and Pervan, 2003). The figure below demonstrates the effects of poor benefits management (Ward and Daniel, 2012): Figure 2.1 Effects of poor benefits management (Adapted from Ward and Daniel, 2012, p. 88) Love and Irani (2004) claim in their findings that a significant difference in the amount of IT investments and firm size is demonstrated by different types of organisation. Lack of strategic vision is emphasised as a major barrier to justifying IT investment. Albeit organisations receive no significant differences in the operational benefits in the post-IT adoption, there are however differences in terms of strategic benefits. If the organisations covered by the study intend to leverage the IT benefits, then the business strategy must constitute it as an integral part. A survey by Ward and Daniel (2006) reveals that the macro IS competence is the least well-developed aspect of the orientations where the survey is conducted. There appears to be weak component competences in these organisations – benefits planning, change management, and benefits realisation (p. 97), which hence results in an inability of the organisation to experience the complete benefits arising from IS/IT implementation. The manner in which the oganisation decides to carry out and supply IS/IT solution generates corresponding influence on the development of these competences. Hence, improving thee competences is tantamount to changing the ways through which IT specialists carry out their tasks vis-a-vis business managers and users (Ward and Daniel, 2006, p. 97). Moreover, the issue of the importance of benefits management can be mirrored in Gerald Bradley’s line, that benefit realisation management may not be a common practice, but is indeed common sense (Bradley, 2010, p. 29). Benefit realisation management is defined as the process involving organising and managing in order to achieve the potential benefits that emerge from investment in change. The process of benefit realisation management can be applied to individual programmes, project portfolios, or business strategy. As benefits are the ultimate deliverables in using business realisation management, the latter proves to be the central theme of a specific change initiative. More than being the afterthought, business realisation management must serve as the foundation of project or programme management (Bradley, 2010, p. 31). 3. Research Methodology 3.1 Research Design This study utilises the qualitative research design as it purports to discuss business benefit management towards an iterative framework for realising business value. This research design allows the researcher to be guided by certain ideas and perspectives about the subject of study. Using the qualitative design, inductive theory development is facilitated where the study intends not to adopt quantification of findings, but instead describes such findings through language (Carr, 1994, p. 716). Moreover, qualitative research adopts an in-depth nature of data analysis. 3.2 data Collection Technique Data collection techniques commonly refer to primary and secondary techniques. The primary technique refers to collecting original data through such methods as survey, interview, focus group discussion, and primary observation; whilst the secondary technique pertains to collecting existing data through books, academic journals, online sources, corporate reports, and the like. This research, being desk-based, relies solely on the secondary technique as it addresses the research problem and objectives. References Bradley, G. (2010) Benefit realisation management: A practical guide to achieving benefits. England” Gower Publishing Limited. Carr, L. (1994) The strengths and weaknesses of quantitative and qualitative research: what method for nursing? Journal of Advanced Nursing, 20: 716-721. Lin, C. and Pervan, G. (2003) The practice of IS/IT benefits management in large Australian organisations. Information & Management, 41 (1): 13-24. Love, P. E. D. and Irani, Z. (2004) An exploratory study of information technology evaluation and benefits management practices of SMEs in the construction industry. Information and Management, 42 (1): 227-242. Money, A. H. and Twite, A. (1995) Effective measurement and management of IT costs and benefits. Newton, MA: Butterworth-Heinemann. Pepperd, J., Ward, J., and Daniel, E. (2007) Managing the realisation of business benefits from IT investments. MIS Quarterly Executive, 6 (1): 1-11. Sofroniou, A. (2004) Change management in IT. UK: SN3 IPH. Van Grembergen, W. (2001) Information technology evaluation methods and management. London: Idea Group Publishing. Ward, J. and Daniel, E. (2006) Benefits management: Delivering value from IS and IT investments. England: John Wiley & Sons. Ward, J. and Daniel, E. (2012) Benefits management: How to increase the business value of your IT projects. Second Edition. Sussex, UK: John Wiley & Sons. Read More