IT Investments at European Airlines – Is IT Viewed as a Strategic Resource?

By Klara Eriksson and Selma Mu – Lund University School of Economics

IT investments are essential parts of a company’s strategy. Deciding whether to invest or not to invest in a certain IT project requires multiple considerations. Our aim has been to find out which are the most important ones. Our study has been conducted as a quantitative one based on a survey inquiry; our 17 respondents operate in the airline industry, a sector which is information intensive but at the same time, for various economical and other factors is forced to be careful about high capital IT investments.

Starting from a theoretical model of IT investment justification we have constructed two new model versions ranking the appraisal techniques and the expected benefits; we have found that the major points of consideration are the existing IT- and operations system together with the software applications, system integration and long-term costs and benefits. Concerning the expected benefits, the financial ones take the first place, budgets inclusive return on investment calculations. Intangible considerations like securing future business, gaining competitive advantage and improve customer relationship are also ranked as the utmost priorities.

In general we can conclude that approximately the two thirds of our respondents consider IT as a strategic resource of the company. It is mostly IT professionals who see IT also as an opportunity for their company. Curiously, those three respondents who determine IT’s roll merely as a support function, have all IT background. Furthermore, three quarts of all respondents confirm that IT is a useful weapon first of all in rivalry with competitors, one of the main battlefields defined by Porter.

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