It value of capabilities: Experiences from a case in business process outsourcing

Abstract

Business value of IT has been a research interest in economics since many decades and has resulted in several approaches, such as process-oriented, perceived value, and scorecard-based approaches. The approach proposed for investigating the value of capability management is to analyze its benefits from a strategic, informational, transactional, and transformational perspective. More specifically, strategic benefits exist if an investment in IT is made to gain a competitive advantage and increase market share. Informational benefits can be assumed if improvement in the information infrastructure for control, planning, or other management tasks is achieved. Transactional benefits typically are connected to automation or at least semi-automation of tasks within an enterprise. Transformational benefits are achieved by IT-related organizational transformations, which lead to new business models and substantial changes in value creation and propositions. This chapter elaborates on the above perspectives and includes typical effects of the business value of IT observed in a selected application case as well as analyzes how to determine them.