The Valuation of Information Technology: A Guide for Strategy Development, Valuation, and Financial Planning [Hardcover]

Christopher Gardner (Author)

Book Description

Series: Financial Management | Publication Date: March 15, 2000

Top executives support The Valuation of Information Technology "This is the first book which I have seen that places corporate decision-making on a logical and quantitative basis. Decisions which have traditionally been done by the 'seat of the pants' are subjected to the same rigorous analysis as is routine in the hard sciences. I think this book strikes off in a completely new direction and deserves to be read by anyone contemplating a career in business." -Dr. Mel Schwartz, Nobel Laureate in Physics 1988 and Professor Emeritus, Stanford and Columbia Universities "An insightful, rewarding evaluation of information technology-with the aim being the creation of shareholder value. Chris Gardner's detailed work shows how powerfully constructive and destructive the forces of innovation can be. Mastering information technology is the key to twenty-first-century commercial success. This book is a driver toward that mastery." -Tom Gardner, The Motley Fool (Fool.com) "Finally, a clear set of tools for those of us who are trying to find a path through a jungle of complexity. Chris Gardner has clearly and crisply provided a road map of rationality to help direct our path through a chaotic world of accelerating change." -Peter Sprague, Founder, Chairman, and CEO, Wave Systems, and former Chairman of National Semiconductor "The Valuation of Information Technology provides a practical, step-by-step approach for analyzing the attractiveness of an information technology system.. Highly recommended." -Derek R. Reisfield, Vice Chairman, Luminant Worldwide, and formerly President, CBS New Media, Chairman, Marketwatch.com, and Member of the Board, Sportsline USA "Information and technology are transforming commerce and challenging traditional valuation methods. The Valuation of Information Technology builds a bridge between familiar valuation, grounded on customer value, revenue, cost, and earnings contributions all on the one side, and the returns available in the new information technology context on the other. With these tools, added to thoughtful application and judgment, you will be a wiser leader investor, and consumer." -Stephen B. Bonner, President and CEO, Cancer Treatment Centers of America "Chris Gardner's book comes at the right time for many businesses which can no longer afford the guessing or the hip-shooting that has been the solution algorithm in many companies. He points out the systemic thinking that is possible and the discipline that is required to tackle the issues in a sound, responsible, and competitively superior way." -Dr. Rainer Famulla, Partner, Andersen Consulting "The Valuation of Information Technology tackles the tough problem of defining the value of new technologies company shareholders using integrated analytical techniques. The methodologies presented in the book are essential to any successful new business development. I highly recommend it." -Dr. Khasha Mohammadi, President, e-Networks, and formerly of Bell Labs "Clearly we have entered an era where many organizations are making 'bet the company' investment decisions in information technology and the Internet. Unfortunately, many of these investments are made on an emotional basis alone. The Valuation of Information Technology provides a significant advance in our ability for making these decisions on a more thoughtful, analytic basis." -Frank Ostroff, Author of The Horizontal Organization "For the first time, The Valuation of Information Technology marries corporate finance with technology marketing to create a technology decision guide focused on what matters most-shareholder value." -Jim Szafranski, Marketing Manager, Tut Systems

Editorial Reviews

Review

??lays out much of the thinking behind iValue's methodology??(CFO Europe, 20 February 2003)

From the Inside Flap

The Valuation of Information Technology Information technology has many well-known success stories, such as America Online, @Home, and Windows(r) 95. However, there have also been far too many failures. The reason for this is that the effect of information technology on a company's shareholder value has been unpredictable. Lacking a method to analyze the value of an IT system, managers are forced to make decisions based on fragmented data and guesswork, which often prove to be faulty. Now, it is possible for you to avoid the same mistakes with your information system choices. The Valuation of Information Technology demonstrates how to assess the shareholder value created by a system before it is built. Top management consultant Christopher Gardner provides a unique framework for analyzing the value of an IT system in a quantitative fashion. This solution-oriented book walks you through every aspect of evaluating an IT system for your business, from concept to shareholder value. Gardner lays out a method that will allow you to not only determine the contribution of a system to shareholder value, but also guide the activities involved in its construction so they create value. Integrating techniques from market research, computer science, and corporate finance, Gardner shows how you can maximize your chances for success in applying information technology. The book is replete with real-world examples from such companies as AT&T, @Home, and Time Warner. These field-tested solutions will help you tackle various practical problems, improve your corporate decision-making, and make more productive use of capital and labor by avoiding investment mistakes. Written from the shareholder value perspective, The Valuation of Information Technology:
* Explains step by step how to estimate the shareholder value created by an IT system
* Describes how the analytical methods provided are applied in practice to get answers, with Internet examples
* Emphasizes ease-of-use with direct language and liberal use of tables and figures
* Shows how any type of IT system can be evaluated using the techniques discussed
Clear and accessible, The Valuation of Information Technology is both a management and analytical tool for developing a successful information system.

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Product Details

• Hardcover: 297 pages
• Publisher: Wiley; 1 edition (March 15, 2000)
• Language: English
• ISBN-10: 0471378313
• ISBN-13: 978-0471378310
• Product Dimensions: 9.4 x 6.4 x 1.2 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 3.3 out of 5 stars  See all reviews (9 customer reviews)
• Amazon Best Sellers Rank: #2,148,350 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

6 of 7 people found the following review helpful:

5.0 out of 5 stars Invaluable Reference for Marketing and Valuing Software, October 4, 2001

By 

game critic "cmcdonald99" (Canada) - See all my reviews

This review is from: The Valuation of Information Technology: A Guide for Strategy Development, Valuation, and Financial Planning (Hardcover)

As a 20 year veteran of in-house software engineering and development, I was recently challenged with creating a business case for developing shrink-wrapped software for global sale. A daunting prospect that better have some serious market anaysis and ROI numbers behind it to satisfy the board of directors. I purchased 4 books on the topic before I found Chris Gardners book, and I breathed a sigh of relief flying to headquarters as a studied and highlighted endless passages in the text. I have since read this book end-to-end; and it was worth every penny I paid for it. If you need formula's for valuation this book has them like several others; if you need a book that takes you end-to-end, from marketing considerations to valuation, this is the book for you. I have a multi-million dollar deal sewn up because my business case looked so good. The COO has even told me it was the most impressive software development business case he has ever seen. I used this book to design a marketing approach and build my business case from the ground-up; and it worked. This book will pay for itself a thousand times over if you really need to understand technology valuation. And you know what; you don't need an MBA to understand it or six months off work to read it.

6 of 7 people found the following review helpful:

4.0 out of 5 stars Good review course, December 31, 2000

By 

Greg Feldberg (Hong Kong) - See all my reviews

This review is from: The Valuation of Information Technology: A Guide for Strategy Development, Valuation, and Financial Planning (Hardcover)

Despite the huge interest in technology stocks and their incredible market volatility in recent years, there have been few sources available for would-be investors wanting to make responsible decisions.

But here's one. Chris Gardner takes you through the bedrock of responsible valuation, discounted cash flow analysis, using an extremely detailed case study of AT&T's acquisition of TCI. He provides the entire AT&T spreadsheet on his website so you can play with it on your own time.

For myself, as an internet equity analyst, the most interesting part of the book was the guide to market research. Gardner has very detailed suggestions on how to decide what to sell, survey what customers want, and estimate how much they'll buy. He cuts some slack for struggling dotcoms looking for customers: "Developers of commercial Internet services have had to rely on their instincts during these early years of the Internet, since market research could not provide much guidance on their prospects."

If you're already in the business, this book provides a good review course in valuation methods; if you're not, it's a good place to start.

5 of 6 people found the following review helpful:

5.0 out of 5 stars Gardner adds substance to Technology Valuation, December 10, 2000

By 

fabrams (Toronto, Canada) - See all my reviews

This review is from: The Valuation of Information Technology: A Guide for Strategy Development, Valuation, and Financial Planning (Hardcover)

Technology and Innovation are proven business drivers for corporate value. Trouble is, not many of us, on or off Wall Street, know how to construct a predictive valuation model, for a technology investment, with any degree of confidence.

Gardner attacks the challenge by presenting a thoughtful approach that synthesizes marketplace business drivers with information system planning; deriving an insightful and sound valuation model.

The book's valuation framework is both comprehensive and detailed (abundant formulas, graphs), but remains accessible to motivated readers by providing problem and solution examples, photographs, and numerous easy-to-understand charts.

Gardner's shareholder value perspective takes technology valuation away from soft metrics, gut feel and elevator pitches, and brings it into the harsh light of financial reality; on this count, the book is most certainly ground-breaking.

Highly insightful, practical and instructive! ....