Navigating the intricate landscape of IT investments in the public sector, Professor Cokky Hilhorst, an expert in Business Information Systems at Nyenrode Business University, spearheaded a comprehensive research initiative shedding light on decision-making processes and their subsequent impact. The study, undertaken in collaboration with researchers from national and international universities, delved into various aspects of IT investments to provide invaluable insights for better control over IT expenditure in public organizations.
Public sector IT implementations often make headlines for the wrong reasons, exemplified by the struggles of the Dutch Tax Authorities’ system. Hilhorst’s research project tackled this pervasive issue through a multifaceted approach. The studies explored the impact of IT investment costs on efficiency in public organizations, the role of language in decision-making, and the application of Reference Class Forecasting (RCF) to enhance project estimations.
Contrary to the negative narratives, the research revealed that IT investments in the public sector yield positive results. Notably, a €1.00 increase in the share of IT costs relative to total organizational costs correlated with an average net cost efficiency gain of €1.08 two years later. This net cost efficiency gain represents a positive change in an organization’s efficiency, showcasing the tangible benefits of strategic IT investments. However, Hilhorst emphasized the variability among organizations, cautioning that not every entity benefits uniformly from such investments.
The research highlighted the influence of language on decision-making processes in IT investments. Abstract language in business cases emerged as an early warning signal, indicating psychological distance from a project and reducing overoptimism, thereby minimizing the likelihood of schedule and budget overruns. Conversely, the study found that concrete language had a stronger association with project overruns. Decision-makers were shown to be susceptible to biased descriptions, potentially leading to investments in less viable projects.
The research advocated for the adoption of Reference Class Forecasting (RCF) in IT project management and risk assessment. By comparing current projects with similar ones from the past, RCF enhances forecast accuracy. Hilhorst’s study demonstrated how RCF could have significantly reduced schedule and budget overruns if applied based on historical project data available at the time.
The profound impact of Hilhorst’s research extends beyond academia. Acknowledging her expertise, she has been invited to serve on various committees in the Dutch public sector. The research findings have not only been published in top scientific journals but have also garnered attention from the media and the Dutch government. Regularly sought after for her expert opinion, Professor Hilhorst’s insights contribute to shaping discussions and decisions in the realm of IT in the public sector.
The research conducted by Professor Cokky Hilhorst and her collaborators stands as a beacon, guiding public organizations towards more informed and effective IT investment decision-making.
