MIS782 - IT Portfolio Theory: A Balanced View of Value, Risk, Return

This report provides a comprehensive analysis of IT assets and their business value returns using IT Portfolio Theory, focusing on a case study. It identifies various IT assets such as Artificial Intelligence, Big Data, Branding, and Consumer Behavior, categorizing them into informational, strategic, infrastructural, and transactional asset classes. The report evaluates the organization's IT portfolio, examining the balance between value, risk, and return, particularly in light of decisions like eliminating creative designers and relying on big data analytics. Furthermore, it employs the Resource Based View (RBV) to assess the organization's resources and capabilities, including financial, human, physical, and innovation resources, and how these contribute to value and rarity. The analysis includes a VRIO (Value, Rarity, Imitability, Organization) framework to determine the competitive advantage derived from these resources. This document is available on Desklib, a platform offering a range of study tools and solved assignments for students.

Running Head: VALUE OF INFORMATION
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Name of the Student
Name of the University
Author Note

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Table of Contents
Task 1 a............................................................................................................................................2
Identification of various IT assets and their business value returns mentioned in the case study
using the IT Portfolio theory........................................................................................................2
Task 1 b............................................................................................................................................4
To what extent does this organization have an IT portfolio which provides a balanced view of
value, risk and return?......................................................................................................................4
Task 2 a............................................................................................................................................5
Based on the Resource based view of the firm (RBV), develop a list of resources and
capabilities that the organization has access................................................................................5
Task 2 b............................................................................................................................................6
How do you think that resources and capabilities add value and rarity for Gap.........................6
Reference.........................................................................................................................................9

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Task 1 a
Identification of various IT assets and their business value returns mentioned in the case
study using the IT Portfolio theory.
Assets IT Portfolio
asset class
Business value
Artificial
Intelligence
Informational
Asset
Artificial Intelligence has been acting beneficial for the
GAP. As after the termination of the creative designers
the company is completely dependent on the aspects of
artificial intelligence in order to understand the trend
and act accordingly to the set trend. this evaluation of
the trend enjoys benefits of creating reference of the
trend that must e followed during the course of the
business.
Big data Informational
Asset
Big data acts as the platform of artificial intelligence
that has been used to analyze the target audience of the
market that helps the brand to decode the style that the
brand needs to develop to get into the top tire of the
trends (Copeland, 2015). Big data also helps in
understanding the demands of the audience that create
the audience base of the brand.
Branding Strategic Asset Branding of the organization is very important in
today’s society as the clients depend on the brand more
than the product that they are purchasing from the
organization. This strategy of branding of the product-
is considered to be one of the most efficient technology
to market for the product that is to be launched in the
market recently.
Consumer
Behavior
Strategic Asset Customer behavior acts the most important aspect
of evaluating the organization in case the organization
has been dealing with the clothing that is completely
dependent on the acceptance of the mass with regards
to the daily change of mood of the clients on which the

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clothing company is based on (Ketokivi, M., 2016).
. This is the reason that checking o customer behavior
observation plays an important role in the process of
the building of the organization.
Marketing Strategic Asset Marketing is the most important strategy for the
clothing companies to set the tends in the society and
uplift the characteristics of the organization as a global
brand (Bonardi and Bergh, 2015). This growth in the
brand stature is possible only with the help of the
proper marketing of the product. This proper marketing
of the product also engages the branding to the people
who are the potential clients of the brand. The
establishment of the brand happens only when the
brand is able to reach out to the people and make the
production of their brand reach the global level.
Operational
Management
Transactional
Asset
Operation management is the most important aspect of
any organization. This aspect gives the content of the
fact that the methodology that has been proving to be
the most important aspect of the organization as the
operation manager is uncharged of the operations that
are being undergone during the course of the
manufacturing methodology (Sodhi, 2015).
Predictive
Analysis
Infrastructural
Asset
Predictive analysis is required in the clothing
organization as the trends that are to be coming in
future has t be predicted in order to start manufacturing
clothing with respect to the upcoming trend is
prediction of the upcoming trend helps the organization
to decide the trend of the clothing that are required to
be made.

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Task 1 b
To what extent does this organization have an IT portfolio which provides a balanced view
of value, risk and return?
The organization has been very efficient in aspect of the IT Portfolio of the organization
as the CEO of the organization, Art Peck has been eliminating the creative designers of the
organization that has been not so beneficial for the organization and the downfall of the
organization has been the major reason of eliminating the creative designers of the company
(Gero, 2014). the designs that were created by the creative designers not being accepted well by
the consumers of the brand this causes the downfall of the brand (Wu and Chiu, 2015). Hence
Art Peck decided to eliminate the creative designers and base the company on the platform of the
IT portfolio. The usage of big data was the most innovative thing that the CEO applied to the
platform of the clothing company in order to increase popularity of the organization of the brand.
The risk that was intruded by eliminating the organization was very high (Schaup, Dorminey and
Dull, 2015). With this increase in the risk for the organization the probability to earn profits was
also increasing as the organization was mainly focusing on the fact of dealing with the trends that
were already established in the market and spotters were hired by Art Peck in order to spot trends
in the social media sites which might act as an inspiration. The inspiration that was gained from
the social media was to be implemented in the process of the manufacturing the clothes. Hence,

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in this case the risk and return trade off is directly proportional to each other leading to the
condition of either growth in stature of the organization or downfall of the organization. In case
the organization seeks success it will reach to the extreme level of success and in case it faces
failure the organization will not have a backbone to stand back as the creative designers were
expelled from their job prospect of the company.
Task 2 a
Based on the Resource based view of the firm (RBV), develop a list of resources and
capabilities that the organization has access.
Resource based View has been a very useful and efficient technology that is being used
in order to gain the proficiency in the market with the resources that are available in the
organization without introducing new instruments and the appliance to gain the market
proficiency (Rousseau, 2017). The items that falls under the category of the Resource based
View also acts as the resources that falls under the categories of the product that increase the
competitive advantage to the organization over the other organizations that are present in the
market providing competence to the organization.
The resource that falls under the fact of Resource based View are as follows: -
 Financial resources
Financial resources fall under the terminology of the tangible resources. The financial
resources of the organization constitutes the amount of the money that the organization has the
potency to borrow (Copeland, 2015). In case of Gap the potentiality of the organization to
borrow funds has been quite high.

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 Human Resource
Human resource falls under the terminology of the intangible resources. The human resource
ideals with the knowledge that the employees of the organization (Schaup, Dorminey and Dull,
2015). The knowledge of the employees like the creative designer was not up to the level with
the job profile of the company which caused the CEO of the company to expel them from their
job profiles (Gero, 2014).
 Physical resources
Physical resources falls under the form of tangible resources of the organization. The
physical resource consists of the location of the firm and the raw materials to which the company
will have access.
 Innovation Resources
An innovation resource falls under the category of the intangible resources of the
organization. This resources deal with the innovations that are needed to brought in to the
company (Sodhi, 2015). These innovations bring n the much required benefits that are required
to provide competency to the organizations that deal with same business plans (Ketokivi, M.,
2016).
Task 2 b
How do you think that resources and capabilities add value and rarity for Gap
Any resources that are being added to the resource list must fulfill the range of the VRIO
(Wu and Chiu, 2015). The consolidation of the resources with respect to the VRIO area as
follows: -

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 Financial Resources
V- The financial resources are valuable to the organization as the monetary aspect of get
organization counts the most important of the organization.
R- The financial resource is rare as it differs from all other organizations in this field
I- The cost of imitating the financial resources are very high as the infrastructure of the
organization varies.
O- The organization of financial resources is very high as the excess cost is cut by expelling the
unwanted employees
 Human Resources
V- The human resources are not valuable to the organization as the CEO of the organization has
expelled the employees and has preferred the usage of artificial intelligence using the platform of
big data (Bonardi and Bergh, 2015).
R- The human resource is not as rare as it does not find importance with respect to other
organizations in this field.
I- The cost of imitating the human resources are very low as the employees that were in the high
hierarchy of the organization as the CEO has terminated the creative designers due to the lack of
impact.
O- The organization of human resources is very low as the excess cost is cut by expelling the
unwanted employees
 Physical Resources

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V- The physical resources are valuable to the organization as the location of the organization
aspect of get organization counts the most important structure of the organization.
R- The physical resource is rare as it differs from all other organizations in this field
I- The cost of imitating the physical resource is very high as the infrastructure of the organization
varies.
O- The organization of physical resources is very high as the infrastructure of the organization is
very well built.

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Reference
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Cohen, P.R. and Feigenbaum, E.A. eds., 2014. The handbook of artificial intelligence (Vol. 3).
Butterworth-Heinemann.
Copeland, J., 2015. Artificial intelligence: A philosophical introduction. John Wiley & Sons.
Gero, J.S. ed., 2014. Artificial intelligence in design'91. Butterworth-Heinemann.
Ketokivi, M., 2016. Point–counterpoint: Resource heterogeneity, performance, and competitive
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Miemczyk, J., Howard, M. and Johnsen, T.E., 2016. Dynamic development and execution of
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International Journal, 21(4), pp.453-469.
Rousseau, H.E., 2017. Corporate sustainability: Toward a theoretical integration of catholic
social teaching and the natural-resource-based view of the firm. Journal of Business
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Russell, S.J. and Norvig, P., 2016. Artificial intelligence: a modern approach. Malaysia; Pearson
Education Limited.
Schaupp, L.C., Dorminey, J. and Dull, R.B., 2015, January. A resource-based view of using
social media for material disclosures. In System Sciences (HICSS), 2015 48th Hawaii
International Conference on (pp. 2396-2405). IEEE.

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Sodhi, M.S., 2015. Conceptualizing Social Responsibility in Operations Via Stakeholder
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Wagner, G. and Choset, H., 2015. Subdimensional expansion for multirobot path
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Wu, L. and Chiu, M.L., 2015. Organizational applications of IT innovation and firm's
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