Green IT/IS investments evaluation within the aviation industry – a focus on indirect costs

Abstract

Worldwide concerns over environmental issues and air travel’s continuous expansion have increased in recent years. This is due to rising carbon emissions caused by the aviation industry’s reliance on information technology and systems (IT/IS), which affects the environment. The review of the IT/IS and Green IT/IS investments evaluation literature has highlighted that there is a dearth of research on Green IT/IS evaluation regarding to the aviation industry. Most Green IT/IS evaluation studies focus mainly on benefits; however, cost is reported as one of the most crucial difficulties preventing organizations from adopting Green IT/IS. Generally, the focus is on the direct costs rather than the indirect costs because the latter are intangible and therefore hard to identify and quantify. However, they can have a great impact on the overall cost/budget and possibly on profitability. Although the traditional IS appraisal techniques are being used in the evaluation process, their incapability to capture the impact of intangibles and non-financial issues are apparent, which noticeably affects overall projects’ success. This research aim is to develop a model for Green IT/IS investments evaluation that enhances the understanding and management of the indirect cost associated with Green IT/IS investments within the aviation industry. The novel aspect of the model is its incorporation of the institutional theory, key internal organizational factors, together with human, organizational and environmental indirect cost factors into one model. This model was validated in the aviation industry in Thailand which had adopted and implemented Green IT/IS. The findings from an in-depth case study reveal that despite, Green IT/IS indirect costs not being perceived as costs and hence not being incorporated into the evaluation process, their effects remain, and lead to issues such as costs overruns, under-optimized budgets, and consequently projects failure. In addition, new Green IT/IS indirect cost factors have emerged which were missing from the current normative literature. Therefore, this research provides decision-makers with a useful model, a comprehensive taxonomy, a set of indirect cost factors that can be utilized during the evaluation process, and management strategies to assist in managing and controlling the impact of Green IT/IS indirect costs. Keywords: Green IT/IS Investments Evaluation, Indirect Costs, Costs Management, Costs overrun, Sustainability, Aviation Industry.