Improving the impact of IT development projects: the benefits realization capability model

Abstract

The return that organizations derive from investments in information systems and technology continues to disappoint. While there are many theoretical prescriptions as to how the planned benefits from an information technology (IT) project might best be realized, there is very little empirical evidence, as to whether such advice is being heeded in practice. Drawing on the resource-based view of the firm, a conceptual model of a benefits realization capability is presented and developed. In this model, the benefits realization capability is operationalized through four distinct competences, each of which is underpinned by a variety of socially defined practices. The model was populated by using a thorough review of the literature to identify and categorize those specific practices that have the potential to contribute to the effective achievement of benefits from IT investment projects. These practices are then studied in an empirical examination of 25 IT projects. The analysis finds no evidence of benefits realization practices being adopted in any consistent, comprehensive or coherent manner. Effective benefits realization requires an ongoing commitment to, and focus upon, the benefits, rather than the technology, throughout a system's development, implementation and operation.

Keywords:

• IT benefits realization
• organizational change
• resource-based view
• practices
• systems development

Acknowledgements

We thank the anonymous referees for the many helpful suggestions made with respect to initial drafts of this paper, as well as the Associate Editor and Editor-in-Chief, for their many constructive proposals, which played an important role in helping to shape the final version of this paper.

Notes

1 In many cases there was evidence that a practice was adopted, but not exactly in the way described in Table 1. For example, practices relating to risk assessment and user expectations' analysis were often conducted, but not with any clear or significant focus on benefits.

Additional information

Notes on contributors

Colin Ashurst

About the authors

Colin Ashurst is the FME Senior Teaching Fellow in IS and Business Transformation in the Business School at the University of Durham. His research interests include IS strategy (identifying opportunities and priorities for IS investments); realizing benefits from IS investments; succeeding with projects and programmes to deliver organizational change, particularly where business innovation and change are significant; improving the productivity of knowledge work; and building the organizational capability to succeed in realizing value from the IS investment portfolio. Colin has broad commercial experience from a range of IT management and consulting roles.

Neil F Doherty

Neil Doherty currently holds the Chair in Information Management in the Business School at Loughborough University. In addition to benefits management, his research interests include the interaction between organizational issues and technical factors in IS development, understanding the reasons for failures of IS projects, strategic IS planning and e-commerce. Neil has had papers published in a range of academic journals, including European Journal of Information Systems, Journal of Information Technology, Journal of Strategic Information Systems, Information Resources Management Journal, IEEE Transactions in Engineering Management, Journal of Business Research, European Journal of Marketing, Journal of End User Computing, Information Technology & People, Behaviour & IT and Information & Management. Neil is currently an associate editor for Information Technology and People and the International Journal of Electronic Business Research.

Joe Peppard

Joe Peppard holds the Chair in IS and is also Director of the Information Systems Research Centre, the IT Leadership Forum and has recently launched the innovative Cranfield IT Leadership Programme. He is also Adjunct Professor at the University of South Australia. Over the years he has held academic appointments at Loughborough University, Trinity College Dublin, Groningen University and the University of Sydney. The focus of Professor Peppard's research and teaching is in the area of IS and technology strategy and management. He has published widely in academic and general business and management journals. His most recent books include Strategic Planning for Information Systems (Wiley) and Customer Relationship Management: Perspectives from the Marketplace (Butterworth-Heinemann). He is currently working on a book Creating a Value-Adding IS Capability: Delivering High Performance, Liberating Business Value. He is European Editor of the Journal of Information Technology and an Editorial Board Member of European Management Journal.