The selection of appropriate technology projects has been one of the most significant business challenges of the last decade. Nevertheless, Information technology projects represent the largest capital expenditure items for most firms, but many projects have been unsucc More
The selection of appropriate technology projects has been one of the most significant business challenges of the last decade. Nevertheless, Information technology projects represent the largest capital expenditure items for most firms, but many projects have been unsuccessful. Because of the importance of such investments, there is a need for a scientific framework to analyze them. This paper analyses and uses Real Options and Mean-Variance theory for risk and return analysis, and ranking the information technology investment projects. These two models offer a simple, but comprehensive method for managers to evaluate potential information technology projects.
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