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Managing an IT Portfolio on a Synchronized Level, or: The Costs of Partly Synchronized Investment Valuation

Title data

Häckel, Björn ; Hänsch, Florian:
Managing an IT Portfolio on a Synchronized Level, or: The Costs of Partly Synchronized Investment Valuation.
In: Journal of Decision Systems. Vol. 23 (2014) Issue 4 . - pp. 388-412.
ISSN 1246-0125
DOI: https://doi.org/10.1080/12460125.2014.946781

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Abstract in another language

IT investments are usually risky by nature and account for a considerable part of annual investment budgets. Though value-based IT portfolio management (ITPM) aims at sustained economic growth and long-term value creation regarding IT investments, companies often fail to implement a synchronized ITPM approach that considers all relevant risk-/return components within IT investment valuation. In this paper we compare a synchronized and an only partly synchronized valuation of IT investments within a company`s ITPM by means of an optimization model. We show that an only partly synchronized IT investment management leads to sub-optimal investment decisions as especially stochastic interdependency structures are neglected. Furthermore, we analyze how different risk-/return structures of IT investment opportunities affect the valuation error resulting from an only partly synchronized IT investment valuation and conduct a comprehensive simulation study to further validate our findings.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: IT Investment Valuation; Risk-/ Return Management; IT Portfolio Management;
Stochastic Interdependencies; Capability Maturity Models
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Research Institutions
Research Institutions > Affiliated Institutes
Research Institutions > Affiliated Institutes > Fraunhofer Project Group Business and Information Systems Engineering
Research Institutions > Affiliated Institutes > FIM Research Center Finance & Information Management
Faculties
Faculties > Faculty of Law, Business and Economics
Result of work at the UBT: No
DDC Subjects: 000 Computer Science, information, general works > 004 Computer science
300 Social sciences > 330 Economics
Date Deposited: 12 Nov 2018 08:25
Last Modified: 12 Nov 2018 08:25
URI: https://eref.uni-bayreuth.de/id/eprint/46278