IT Portfolio Selection and IT Synergy

This dissertation consists of three chapters. The primary objectives of this dissertation are: (1) to provide a methodological framework of IT (Information Technology) portfolio management, and (2) to identify the effect of IT synergy on IT portfolio selection of a firm. The first chapter presents a methodological framework for IT project selection. As the size of IT investment in firms dramatically increases, the demand for strong methodologies of IT project selection increases. We use the efficient frontier as a tool to solve the IT project portfolio problem. We propose a model of IT portfolio selection with this view. Our method is unique in that IT synergy measures are systemically incorporated in the portfolio selection. The second chapter examines how firms can use IT synergy to optimize their IT portfolios. We begin by developing a framework for IT portfolio selection by identifying three types of IT synergy. Next, we examine the effect of different types of synergy on the IT portfolio selection by using this framework. Analytical models are developed to present the roles of different types of synergy. The analysis in this paper establishes conditions where firms obtain superior IT portfolios by enhancing IT synergy. In the third chapter, we develop a project portfolio selection model, focusing the issues of the non-linear return/risk relationship of IT investment and non-standardized measures of IT risk. Taking advantages of the benefits of the DEA method, we present a project selection model and an extended model, and demonstrate the validity of the model using computational studies. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]