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Please use this identifier to cite or link to this item: http://bura.brunel.ac.uk/handle/2438/5373

Title: Investment justification of information systems: A focus on the evaluation of MRPII
Authors: Irani, Zahir
Advisors: Ezingeard, JN
Grieves, B
Keywords: Manufacturing Resource Planning (MRPII)
Capital budgeting
Investment appraisal
Generic appraisal techniques
Traditional accountancy frameworks
Publication Date: 1998
Publisher: Brunel University School of Engineering and Design PhD Theses
Abstract: A review of the normative literature, in the field of Information Technology (IT)/ Information System (IS) justification, examines how organisations evaluate their investments in Manufacturing Resource Planning (MRPII). This is achieved through investigating the issues surrounding capital budgeting, with a particular focus on investment appraisal. In doing so, a novel taxonomy of generic appraisal techniques is proposed. This taxonomy identifies a number of methods for appraising MRPII investments, and through describing these techniques, a classification is offered that identifies their respective characteristics and limitations. In doing so, it becomes clear that although many of the benefits and savings resulting from MRPII are suitable for inclusion within traditional accountancy frameworks, it is their intangible and non-financial nature, together with a range of indirect project costs that confuse the justification process. These factors, together with a range of human and organisational implications, that further complicate the decision making process are also identified. Hence, it appears through a critical review of the literature that many companies are unable to assess the implications of their MRPII investments, thus amounting to a myopic appraisal process that focuses on the analysis of those benefits and costs that are financially quantifiable. In acknowledging the limitations of traditional appraisal techniques, a conceptual model for IT/IS investment evaluation is proposed, which is underpinned by research hypotheses. To test the validity of the proposed hypotheses, a robust novel research methodology is then developed. In doing so, an interpretivist stance is adopted, which favours the use of qualitative research methods during a multiple case enquiry. Whilst conducting the empirical research, it soon emerged that the hypotheses represented significant factors for consideration within the presented model. As a result, such constructs now establish themselves as integral parts within a structured evaluation process. However, during the empirical research, complementary evaluation criteria also emerged, which resulted in modifications being made to the previously presented conceptual model. In doing so, culminating in the development of descriptive MRPII evaluation criteria and a model, which provides investment decision makers with novel frames of reference during the evaluation of MRPII investment proposals.
Description: This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University.
Sponsorship: Department of Manufacturing and Engineering Systems (M&ES), Brunel University
URI: http://bura.brunel.ac.uk/handle/2438/5373
Appears in Collections:School of Engineering and Design Theses
Advanced Manufacturing and Enterprise Engineering (AMEE)

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