The Illusions and Practices of Technology Based Service Innovation: Capturing and Measuring Business Value

While economies in the industrialised World have become increasingly knowledge driven and service based, much of the work on capturing and measuring business value is still constrained and steeped in the thinking of the manufacturing era. One area that is more susceptible to measurement is the field of technology based or enhanced services. This case analysis seeks to explore how a service operator, such as an international airport, can gauge value from investment into IT. We examine how the airport operator combines a variety of accounting techniques and other tools to capture value from their IT investments. We explore how the operator could improve their measurement of business value derived from their IT investment. One observation of practice is that value capturing tools and techniques are used in parallel rather than ‘in sync’. Drawing on the notion of user innovation, we argue operators should embrace a systemic approach in adapting and modifying measuring regimes to accommodate service based innovation.