A Conceptual Model for Aligning IT Valuation Methods

The relationship between IT and value is complex and often disputed. Researchers and practitioners have created numerous models and valuation methods to capture this value. Although payoffs from IT investment are a function of strategic alignment, most of these models do not address the alignment of business and IT as a factor that influences or creates value. This paper explores the role of business and IT alignment in the valuation methods of IT assets and investments. It focuses on the impacts resulting from the use of IT assets, considering the function and nature of the impacts. It also explores the alignment of IT valuation and business strategy. The paper is concluded with the construction of a comprehensive selection model that provides guidance for aligning the IT valuation method with the specific characteristics, impacts and organizational context of an IT asset or investment.