ABSTRACT
Two major problems in applying traditional models for evaluating AMT investments have been discussed in the previous chapter: the problem of quantifying the intangible benefits of AMT investments, and the problem of measuring and incorporating project risk into the investment model. These problems have led to a growing literature devoted to investigating them and providing possible solutions. This literature can be divided into two major strands. In the first strand researchers attempt to develop theoretical models which aim to overcome the shortcomings of traditional investment decision models based on ROI and cash flow analysis. This type of research can be described as ‘normative’. The second strand of literature is based on empirical investigation of the practice of AMT investment decision making by either survey based research or field studies. This type of research can be described as empirical or ‘descriptive’ research. The major difference between these two strands is that normative researchers seek to formulate decision models that describe how decisions should be made while descriptive researchers seek to explore the practice of decision models as it exists (see, for example, Ijiri, 1972; Bell et al., 1988; and Ryan et al., 1992). Bell et al. (1988) add a third type of decision making research which they call ‘prescriptive’ research. They use this term to describe a type of research which combines both normative and descriptive approaches in producing a decision model.
