Measuring the customer value of information technology
Authors
Date
1999
Type
Thesis
Fields of Research
Abstract
Effective models for the management and evaluation of information technology are developing. However, evidence suggests more emphasis should be placed on customer value. Customer value is the relative significance of the attributes of a given service or product compared to the price. The role of technology has become central to business function in a large number of organisations and the effectiveness of technology in delivering customer value directly impacts on the success of the firm.
To provide a basis for the argument that more consideration should be paid to customer value an outline of the background to technology management is provided. Models and characteristics of information technology are presented to illustrate current issues and thinking.
Competitive pressures require that companies receive maximum value from large-scale investments in information technology. Arguments for considering why customer value should play a role in the management and evaluation of information technology investments are discussed.
Customer value analysis techniques provide valuable insights into the needs and wants of customers and when linked to internal measures can provide powerful management tools. The development of systems that capture customer information is an area of rapid growth as companies seek to improve their customer knowledge.
A case study is used to illustrate the techniques and the application of customer value analysis. The case study illustrates how customer value analysis is used to select among competing IT projects by showing which projects contribute the most to customer value. The case study also shows how customer value is linked to internal systems to facilitate day to day management.
In conclusion important management considerations and potential gains from giving weight to customer value are discussed. Successful management of information technology in an organisation is a driver for ensuring value and effectiveness from investment in technology.