A new strategic information technology investment model

Many of the financial instruments used in classic investment analysis do not apply to typical information technology investment decision making because of the multi‐criteria and multi‐objective nature of the problem. This is particularly true when integrating strategic, tactical, and operations planning objectives in the decision. One approach for making IT investment decisions is a multi‐objective goal programming (GP) model proposed by Talluri in 2000. The purpose of our paper is twofold: to demonstrate how a simple ranking/scoring method can be used in place of the more involved Talluri GP modeling approach if only a solution is required; and, in decision situations where solution justification is desired, to explain how GP extension methodologies can be incorporated into the analysis to generate information to determine a solution’s reliability and identify economic tradeoffs that can be used to improve an existing solution.