The hidden investments in information technology: The role of organisational context and system dependency

Management effectiveness is strongly influenced by the quality and availability of the information resource available to managers. This is partially dependent upon the information and communication technologies which transport events, data and knowledge from isolated consciousness to individual and collective awareness. However, the use of these technologies rarely occurs in isolation. Rather, it is embedded in a far wider organisational context which recognises the politics of decision making and technical change, and the broader culture and experiences of organisations. Central to this is understanding how information technology (IT) investments cause organisations to reflect on the importance of their processes of communication and the value they place on information. A key part of this organisational flux acknowledges that IT applications are built on the existing systems, structure and past experiences of the organisation. Accordingly, investments in IT form part of an ongoing organisational development. Such intangible aspects create a dilemma for management in that they prove problematic to evaluate using conventional approaches to cost justification. By drawing on a series of case studies, questionnaires and interviews, this paper suggests a fresh approach to this dilemma by developing the concepts of dependency, legacy and heritage. The paper concludes by recognising that current approaches to investment appraisal emphasise a narrow, short-term perspective which focuses on a single investment, rather than on a continuous investment stream. Copyright (C) 1996 Elsevier Science Ltd