Measuring the Return on Information Technology: A Knowledge-Based Approach for Revenue Allocation at the Process and Firm Level | Zendy

Paul A. Pavlou | Zendy; Thomas J. Housel | Zendy; Waymond Rodgers | Zendy; Erik Jansen | Zendy

Open Access

Measuring the Return on Information Technology: A Knowledge-Based Approach for Revenue Allocation at the Process and Firm Level

Author(s) -

Paul A. Pavlou,

Thomas J. Housel,

Waymond Rodgers,

Erik Jansen

Publication year - 2005

Publication title -

journal of the association for information systems

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 1.877

H-Index - 78

ISSN - 1536-9323

DOI - 10.17705/1jais.00069

Subject(s) - operationalization , revenue , computer science , process (computing) , measure (data warehouse) , productivity , return on investment , information technology , knowledge management , information system , process management , business , economics , data mining , production (economics) , finance , microeconomics , engineering , electrical engineering , operating system , philosophy , macroeconomics , epistemology

This paper proposes an approach for measuring the return on Information Technology (IT) investments. A review of existing methods suggests the difficulty in adequately measuring the returns of IT at various levels of analysis (e.g., firm or process level). To address this issue, this study aims to develop a method for allocating the revenue and cost of IT initiatives at any level of analysis using a common unit of measurement. Following the knowledge-based view (KBV), this paper proposes an analytic method for measuring the historical revenue and cost of IT investments by estimating the amount of knowledge necessary to generate a common unit of output from any business process. The

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