IT Value Engineering Model Concept

A. Problem Formulation

In preparing this paper, various statements related to the major problem are constructed on succeeding problem formulations: in doing a business, several firms start from preparing resources, including IT resources, afterward, they organize those resources in order to achieve a superior performance. Nevertheless, to do the business, a firm can also begin from determining required performance in terms of planning the resources with the intention of accomplishing a cost advantage, which is one of the categories of competitive advantages [26].

However, the firms occasionally have not paid attention to the cost efficiency resulting in a waste of resources. In other words, the process of value engineering, namely the acquisition

Also, this concept stands to benefit substantially in cost reduction from the capital allocation, especially the IT capital inclusion. In addition, for instance, the IT inclusion can not only improve performance, but also deliver consequences such as the effectiveness of business processes, quality improvement, acceleration of the process, etc. Furthermore, the optimization of cost efficiencies with superior performance is crucial for the continued competitiveness of the firm. In this paper, the IT value engineering model concept is analyzed for its feasibility and stages for effective implementation are

According to the RBV-based researches, each IT resource, its capability, IT-based core competence, and competitive advantage has close relationships. In sequence, this relationship may result in a conceptual model of IT value engineering [15].

2) This research is a continuance of previous researches, thus, it is not dedicating to modeling the relationship between IT and the organization performance. This model has been performed by past studies such as [15], [10], and so forth.

3) To exploit quantity relationships among subsystems of the conceptual model of IT value engineering, PAV theory with a static speed of adjustment [13] appears to allow the model to develop relations among the subsystems [27]. Likewise, to complete PAV especially in the required output function, the Cobb-Douglas production function is adopted to relate regular capitals, labor expenses, and IT spending.

4) According to the model on 2) and the additional theories on 3), this research scrutinizes about how to engineer the value of IT within IT-based organizations, in turn, the IT resources can be governed in