Discovering potential and realizing value from information technology investments

Information technology (IT) value has been measured at various levels of an alysis, yet few authors would contend that the search for value has reached a point where practitioners and theoreticians are satisfied with its outco mes. We present a new perspective that emphasizes the importance of underst anding where potential value lies and how best to relate it contextually to the measurement of the firm's realized value across multiple levels of ana lysis. We develop the idea that complementary assets (especially business p rocess design and human capital) influence the firm's realization of value, using concepts such as locus of value and value conversion contingencies. Expanding beyond earlier process models of IT value, which begin with IT ex penditure, our analysis of IT value emphasizes the consideration of potenti al value for an IT investment both in ex ante project selection, and ex pos t investment evaluation. We illustrate and validate the application of our framework using IT investments in a variety of business domains.