Title

Estimating The Knowledge Value-Added Of Information Technology Investments

Keywords

Information technology; Knowledge value added; Return on information technology; Return on knowledge; Simulation

Abstract

Information Technology investments can be complex and therefore difficult to measure when looking to allocate, improve, or select the processes that better meet the goals of the organization. The most known and widely used methods use cash flows and tangible assets to measure the impact of investments in the organization's outputs. But in the last decade, many newer organizations whose outputs are heavily dependent on information technology utilize knowledge as their main asset. These organizations' market values lie on the knowledge of its employees and their technological capabilities. Knowledge Value-Added has emerged in the last decade as a method to estimate the performance of knowledge assets. This research investigates the application of the knowledge value-added approach to measure the earned knowledge value of information technology investments. This research will specifically develop a discrete event simulation model on knowledge processes performed by Information Technology (IT) to measure the knowledge value added of core IT processes in an organization. The simulation will measure coreprocesses' knowledge using the KVA technique at pre- and post-IT investment states. The product of the simulation will be the measure of knowledge-value processes before and after IT investments are utilized. Therefore, the model will provide the value-added of the IT changes as a framework for comparison and decision making based on the intangible knowledge value added by information technology processes. This measurement of knowledge value will provide a realistic framework for analysis of technology processes where traditional cost methods are not appropriate, and enable managers to better allocate and control technology-based processes. The simulation will also look to provide outputs of the knowledge-value added of IT process investments under consideration for replacement of actual processes before the investments are undertaken.

Publication Date

12-1-2008

Publication Title

IIE Annual Conference and Expo 2008

Number of Pages

1849-1854

Document Type

Article; Proceedings Paper

Personal Identifier

scopus

Socpus ID

63849295644 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/63849295644

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