IT Investment Impact Implication Model

This graphically triangular model consists of three components. One describes the maturity of the business, the second concerns the alignment of IT systems to business strategy, the third the homogeneity of the IT systems. The impact is derived from the “pressure” inside this triangle. That is, the smaller the sides, the smaller the volume, the greater the pressure.

Fig 1. “4x I Model”
(source: author)
With reference to the first conclusion made, “that the optimal impact of IT investment occurs at the confluence of three factors. The alignment of IT systems with the business’s strategy, the homogeneity of systems across the organization, and the maturity of the business”, are the three related components. The ‘alignment of IT systems with the business’s strategy’ has to do with the degree of separation between the IT strategy and the host business’s strategy. One example of this is where the IT department is constantly second guessing the needs of the business. It is where there is no real communication between the executive and the IT department, or where there is no understanding within the executive of what benefits IT can bring to the business. Thus, the smaller this spread, the greater the positive impact upon business’s long-term expected value. The second component, ‘the homogeneity of systems across the organization’, concerns the spread of system types to achieve the same functions. For example, does one section of the business use a different brand of computer operating systems to another? Therefore, the greater the level of homogeneity, the greater the positive impact upon the business’s long-term expected value. The third component, ‘the maturity of the business’, is a reflection on both the pervasiveness, and consistency of application, of internal administrative processes. The model posits that the greater the maturity of the firm implies a reduction in organizational risk, thus a positive impact upon business’s long-term expected value.

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