Valuation of Information Technology (IT) Capability in the Business: A Case Study at PT. Telekomunikasi Indonesia, Tbk.

Valuation of Information Technology (IT) Capability in the Business: A Case Study at PT. Telekomunikasi Indonesia, Tbk.

Author		: LUKMAN ABDURRAHMAN; Armein Z.R. Langi; Suhardi
Published on	: International Journal on Electrical Engineering and Informatics (STEI ITB)

Abstract

There have been many studies pertaining to IT research providing us with a variety of topics. This study deals with the value of IT, which is also an interesting topic. Although there are many studies regarding the IT value, however until now there are not yet any researches discussing an exact method to estimate this value. Accordingly, this study tries to present a sequence of methodology to assess this value using both qualitative and quantitative methods. The offered methodology addresses valuation of IT by means of IT value definition approach as a division of functions by costs. This valuation will be achieved by analyzing functions and costs previously, in turn, results in the intrinsic IT value. Additionally, this value is then brought together to the business environment, i.e. the Business Model Canvas so it will bring up a new added value named an extrinsic value. In this case, the total value may be the product of these two values. Furthermore, this methodology using the Telkom data is simulated to test its accuracy. The results show that there is an alignment between the offered methodology and the case study, although there still should be improved here. Based on this methodology, IT value engineering can be worked out at a later.