Valuation Methodology of Information Technology (IT) Value in the IT -based Business A Case Study at a Leading Telecommunication Company

This study aims to propose measuring the IT value, which is still in a lengthy discussion because concrete solutions have not existed to explicate it. Therefore, this study tries to present a sequence of methods to assess this value through both qualitative and quantitative methods. The presented methodology addresses the IT valuation by means of the IT value definition approach as a result of the division between the IT functions and the IT costs, which is achieved by analyzing functions and costs previously, consecutively, results in the intrinsic IT value. Additionally, this value at that point works together with the business environment, i.e. the Business Model Canvas so it brings up a new added value entitled an extrinsic IT value. Thus, the entire IT value manifests as the product of these two values. Furthermore, Telkom data appear to examine this valuation methodology, where the results show that an alignment appears between the presented valuation methodology and the case study, although it still needs a number of improvements. Based on this valuation methodology, the IT value engineering concept can be optimistic to continue research at the subsequent time.