Healthcare Quarterly

Healthcare Quarterly 1(4) June 1998 : 53-56.doi:10.12927/hcq.1998.16573

Investment in Information Technology: The Dilemma of Comparing Costs to Benefits

Kevin J. Leonard


Most strategic investment decisions incorporate a business-case evaluation; all of the future benefits are weighed against current and future costs. The objective, of course, is to invest only in initiatives that have more benefits than costs; and so their accurate evaluation is very important. Otherwise the decisions that result may be less than optimal.

Business cases for new technology or new information systems (IS) are no different. Although the cost components of technology, such as hardware and programming are usually straightforward, the benefits are very difficult to measure (Laudon and Laudon 1996). How do you put a price tag on the "ability of someone to do their job better"; or how do you calculate "people enjoying their jobs more and, consequently, being more effective"? This article discusses the dilemma of evaluating the benefits of information and information systems in an attempt to support in the development of new and effective IS in healthcare.



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