A framework for analysis on the process of Information System evaluation and investment decision

Information System (IS) investment evaluation has long been issue in the IS research. Traditional positivistic research dealt with cost-benefit rationale regarding why and how evaluate. Afterwards social and political view added issue to this stream by embedding the organizational context that makes evaluation more fraught with difficulties. The purpose of this paper is to provide a theoretical foundation and justification of the various organizational aspects of IS evaluation and decision process. By reviewing recent research that adopts institutional theory perspective on this issue and we develop two-staged evaluation process model constructed by the interaction among stakeholders and their roles. Participants of the process are two groups: IS evaluator group who evaluate the benefit of investment, and decision makers who examine suggestion of evaluator group and finally determine to invest or not. We argue that, during this interaction process, the organization's institutional context influences the extent of the formality of evaluation criteria and the procedural rationality. From this dynamic process perspective, we propose a multidimensional analysis framework that constitutes four types of evaluation orientation: Mixed, Positive, Negative, and Control Evaluation Orientation. With this framework we discuss how stakeholders behave and affect investment decision under each evaluation orientation. Likewise, we also discuss how financially justified IS investments can be sometimes rejected or otherwise accepted in the politically situated evaluation process. We believe that this framework expands our understanding of IS evaluation and decision process and therefore contribute to IS research in this field. Also to practitioners, this study provides several implications regarding how to maintain the formal/rational evaluation procedure and how to acquire organizational consensus under socially complex organizational environment.