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These data constitute what might be called a
project’s internal scenario, which excludes
consideration of both business environment and
strategy. As such, they are an insufficient basis for
decisions aimed at achieving a project’s business
value.
In order to identify the relevant data, then, it is
necessary to understand how a project might
produce value.
Marshall, McKay and Prananto (2004),
expanding a previous work by Soh and Markus
(1995), argues for a Process Theory approach for
value generation by information technology.
From this perspective, IT investment represents a
necessary but not a sufficient factor for the
generation of value. The latter, in the form of
business performance gains, is the outcome of a
chain of processes, each one necessary, but
insufficient by itself to guarantee the final result, as
follows:
− Through the alignment process, strategic
objectives will determine what IT investment
is required. That involves identifying
opportunities and threats, understanding
strategy and the opportunities for using IT to
implement it.
− The determined investments will then generate
IT assets through a conversion process. This
contains the design of IT strategies and the
choice of those organisational structures able
to realize them appropriately.
− Depending on how it is used, IT assets will
impact the organisation. The process of use
involves both redesign (in terms of
organisational processes and structures) and
redefinition of roles in order to adjust them to
the IT-induced changes.
− Finally, the impacts resulting from the use of
the assets created by IT investment may lead
to performance gains, depending on the
process of competition, in which the
organisation is situated. The said process
entails the nature of competition within the
industry, competitors’ behaviour, and general
economic conditions.
These authors argue that, for the production of
value, each of these processes must unfold
appropriately. If any one fails, no value is generated.
By the same token, no one process can guarantee
success by itself.
Thorp (1999) also tackles this question, with a
focus on what he calls ‘The Information Paradox’.
This is indicated by the absence of any clear
correlation between IT investment and gains in
organisational performance. According to this author
the paradox results from a mistaken approach in
which an IT project is seen as isolated from its
organisational context.
Like Marshall, McKay and Prananto (2004),
Thorp (1999) claims that IT is incapable of
generating value by itself. Rather, it must be suitably
integrated with other organisational elements
thereby forming what the author calls a ‘Results
Chain’.
The focus of Thorp’s approach (1999) is that a
project should be managed in tandem with all
changes in business processes that it provokes,
rather than in isolation. Other initiatives
complementary to the IT project will be required if
the expected benefits are to materialise. These may
take the form of training programmes, alterations in
organisational structure, marketing initiatives and so
on.
As a tool for assessing project development,
Thorp (1999) proposes a set of key questions that
can be interpreted as follows:
− Is the right thing being done? The aim of this
question is to ensure that project and an
organisation’s business goals are aligned.
− Is the project in the right way? Here the
objective is the integration of project with
organisational processes and structures
−
Is the project being well-done? This question
concerns the presence of adequate staff
capacity, competence, resources and
infrastructure to advance a specific project.
− Can benefits be achieved? The focus here is
on the external context and conditions in
which project aims may be realised.
In both Process Theory and the Results Chain,
organisational strategy is a key issue in project
success. For value to be produced, alignment with
strategy is of central importance. It is therefore
essential to understand the processes of developing
strategy and those elements which define it.
According to Ansoff and McDonnel (1993),
organisational strategy is a function of the Strategic
Business Area, the SBA, which means a segment of
the business environment in which action or
intention to act occurs.
Porter (1979) claims that ‘the essence of strategy
is dealing with competition’, which in turn is defined
by the relations among a set of forces such as
substitute products, customers and suppliers, and
competitors, both new and old.
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