Abstract
In this article, the economic evaluation of information system projects using
present value is analyzed based on triangular fuzzy numbers. Information
system projects usually have numerous uncertainties and several
conditions of risk that make their economic evaluation a challenging task.
Each year, several information system projects are cancelled before completion
as a result of budget overruns at a cost of several billions of dollars
to industry. Although engineering economic analysis offers tools and techniques
for evaluating risky projects, the tools are not enough to place information
system projects on a safe budget/selection track. There is a need
for an integrative economic analysis model that will account for the uncertainties
in estimating project costs, benefits, and useful lives of uncertain
and risky projects. In this study, we propose an approximate method of
computing project present value using the concept of fuzzy modeling with
special reference to information system projects. This proposed model has
the potential of enhancing the project selection process by capturing a better
economic picture of the project alternatives. The proposed methodology
can also be used for other real-life projects with high degree of uncertainty
and risk.
