Research On Information Technology Project Investment Decision Model Based On Portfolio Balance

The rapid growth of information technology investment and high unsuccessful rate make IT investment decision face challenge,but there are some limitation in traditional study. Firstly, most of methods neglect to harmonize IT investment decision making with other IT activities,and neglect to cosidering single IT projects as part of a portfolio by balancing cost,return and risk; Secondly, many decision making models can not describe the dynamic process aligning IT investment with enterprise strategy;Thirdly,the influence of political and personal interests among stakeholders on the decision making process has not been widely discussed;Finaliy,many models emphasis on project evaluation rather than the exploration of the whole decision making process,and over rely on economic-base evaluation methods.This dissertation strive to define the requirement of a good IT investment decision model by literature analysis and system thinking. According to the illumination obtained from Val IT governance frame and IT portfolio management,we develop a IT investment decision making model based on portfolio balance. To explain the model, a series of approach is used to illustrate the model's application in two system methods :rigid system thinking and soft system thinking. Finally,we utilize a case to describe the proposed approach that can assist decision maker in selecting suitable IT investment projects.This dissertation makes effort as the following:Firstly,put forth a IT investment decision making model based on portfolio banlance. Taking IT project as part of a portfolio into account,the model achieves balance among cost,return and risk in considering two goals that are strategic alignment and financial income.Scondly,the method level to indicate the detailed steps for modeling and to solve the social-political problem in decision making process. The paper also extend some traditional theory which include Analytic Network Process,real option and multi-objective linear programming.The innovation point of this dissertation can be concluded as:Firstly,develop the decision making model under a system framework which integrate value governance,portfolio management and investment management to enable IT investmet to creat value;Secondly, a method which decision making right distribution matrix is used to describle the influence of stakeholders on the decision making process;Finally,in the process of developing the fuzzy muliti-objective linear progrmming,the study get a useful tool to achieve balance among IT projects' cost,return and risk.