Preliminary surveys and literatures on information system investments suggests a high increase onrnthe level of investment, while there appears to be a lack of concrete empirical research on the area.rnIn an attempt to explore the extent of this presumption, this research investigates the current staternof IS investment and its process within Ethiopian banking institutions. Several theories andrnempirical outcomes were proposed to explain the investment pattern, appraisal techniques and postrninvestment perception of IS adopters by the study subjects. To this end, the results of the studyrnshowed that information system investments are justified by information system heads, with therninvestment pattern focusing mainly on transaction processing systems (100%), managementrninformation systems (95%) and communication systems (63%). Furthermore, the study revealedrnthe wide application of simple strategic investment appraisal methods, while the level of usage ofrndiscounted cash flow techniques and sophisticated analytical and integrated techniques being low.rnTo illustrate, Strategic techniques were found to be very popular with Technical importance andrnSWOT analysis being used 100% and competitive advantage and critical success factor being usedrnby 95% of the responding banks. Adding to this findings, the study showed the degree ofrnperception investors have on the relative advantage brought by the system and the compatibilityrnof the system with the organizations setting, in doing so the respondents showed a positivernperception that was revealed with a mean value of 4.86 and 4.43, respectively: on a 1 to 5 scalernwhere higher value represents higher agreement. Based on this findings, recommendations werernmade for a divers composition of professionals and appraisal techniques on IS investmentrnjustification process.rnKey Words: Information System, Information Technology, Investment Appraisal Techniques