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Quantifying the value of IT-investments

机译:量化IT投资的价值

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We described a method to quantify the value of investments in software systems. For that, we adopted the classical risk-adjusted discounted cash flow model and geared it towards the field of information technology. This resulted in a scenario-based approach incorporating two IT-specific risks that can substantially influence IT-appraisals. They are requirements creep and time compression. To account for the risk of failed IT-projects and overrun risks we proposed the Weighted Average Cost of Information Technology (WACIT). WACIT adjusts the well-known Weighted Average Cost of Capital, commonly used in discounted cash flow models. We proposed several methods to approximate WACIT ranging from an investment-specific rate to a (company-wide) one inferred from a quantitative IT-portfolio analysis. We illustrated our quantitative IT-investment management approach by way of a published example. For various risk-scenarios, we calculated using this example the impact on the firm's share price, standard economic indicators like NPV, IRR, PBP, ROI, RAROC, and more, in order to come to grips with the appraisal of information technology―the largest production factor of today.
机译:我们描述了一种量化软件系统投资价值的方法。为此,我们采用了经典的风险调整后的折现现金流量模型,并将其用于信息技术领域。这导致了一种基于方案的方法,其中包含了两个可能严重影响IT评估的特定于IT的风险。它们是需求蠕变和时间压缩。为了解决IT项目失败和超支的风险,我们提出了信息技术加权平均成本(WACIT)。 WACIT调整众所周知的加权平均资本成本,通常在折现现金流模型中使用。我们提出了几种近似WACIT的方法,从特定投资率到从整个IT组合分析推断出的(整个公司范围内)。我们通过一个公开的例子说明了我们的定量IT投资管理方法。对于各种风险场景,我们使用此示例计算了对公司股价的影响,NPV,IRR,PBP,ROI,RAROC等标准经济指标等,以便对信息技术进行评估。今天最大的生产要素。

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