and Answers with Chris Gardner
The Valuation of Information
kinds of problems can your book help me solve?
What valuation method do you use?
How can I make a suggestion about the book?
I think I found an error in your book, what should I
Where can I get a copy of your book?
Are there any other books on the subject you
Q: What kinds of problems can your book help me
way to think of the book is as a measuring tool, designed to assess the value
of an information technology system. The problems the book can help solve
are therefore those where a measurement of the value of an information technology
system is of interest, and there are many examples of this. A measurement
can be made:
- before a system
is built, to make an investment decision.
- while a system
is being built, to guide the development effort.
- after a system
is built, to learn from experience.
- of alternatives,
to decide which to pursue or to manage them as a portfolio
- to determine the
degree of importance of a system
- to reveal critical
- to weigh whether
to make or buy
- of the benefits
of merging or divesting a system.
The measurement process itself, described in the book, can be incorporated
into the strategy, operations, and organization of a company, to instill
more economic discipline applying information technology. The measurement
What valuation method do you use?
- what questions
- what the answers
should look like
- how to do the analysis
to get the answers whenever a system needs to be evaluated.
The discounted cash flow
method is used to assess the value of an information technology system. There
is a large body of evidence that strongly supports the reliability of this
approach to measuring shareholder value, and for this reason it has been adopted.
The economic profit (or EVA) approach is more appropriate for tracking operational
performance so it was not used. Real options have been incorporated by examining
prospective investments, and providing visibility into entry and exit costs.
The benefits of this technique have been realized this way, while minimizing
Q: How can I make a suggestion about the book?
I think I found an error in your book, what should I do?
and criticism are welcome, factual or otherwise. They can be sent to me
by clicking the "Contact the Author" button on the homepage of this website
Though every effort has
been made to eliminate errors, unfortunately, a book such as this probably
contains some. Please bring them to the author's attention by clicking the
"Contact the Author" button on the homepage of this website. Corrections will
be posted on this website and incorporated into future printings of the book.
Thanks for your help.
Q: Where can I get a copy of your book?
The book is available
from any bookstore, though you may have to order it. Amazon, Barnes &
Noble, Borders, the Harvard/MIT COOP, Stanford University Bookstore, University
of Chicago Bookstore, Yale Bookstore, etc., carry it. It is distributed worldwide.
Free copies are available to qualified institutions. A limited number of copies
have been donated to groups who can make use of the book, but are poor or
in some way disadvantaged.
Q: Are there any other books on the subject you
An extensive bibliography
can be found in the back of the book. It covers each of the main topics, and
is organized by chapter. That said, the book was written because there was
a gap in the literature. There is nothing in the current literature on business
and technology, of which the author is aware, that addresses the subject of
this book in a quantitative way. This book starts with an initial information
system concept and carries it all the way through to a quantitative determination
of the actual effect the information system has on the share price of a company.
It integrates techniques from three different disciplines-market research,
computer science, and corporate finance-to show how to maximize the chances
for an economic success in applying information technology. It is a disciplined,
rigorous book, not a casual read.
A major flaw of most
books on the management of technology is that they do not treat their subject
in a multidisciplinary and quantitative fashion. The focus is usually on
one aspect of the management of technology such as marketing, finance, manufacturing,
or research and development, which is discussed in a prolix style.
The result is a book that provides a partial view of the problem and does
not get specific about economic impact. The books that do provide a quantitative
approach unfortunately do not focus on information systems. Yet business
executives and technical professionals are expected to be able to judge
the impact their information system decisions have on a company's share
price. Today, most rely on their experience and intuition to sort through
this problem, which is often faulty as their track record shows.
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