ERP implementation: a quantitative model for organisational learning Online publication date: Sun, 31-Dec-2006
by Liang-Chuan Wu, Yao-Wen Hsu, Chorng-Shyong Ong
International Journal of Information Technology and Management (IJITM), Vol. 6, No. 1, 2007
Abstract: This paper explores the long-term impact of Enterprise Resource Planning (ERP) investment decisions that are costly from an organisational learning perspective. Our objective is to evaluate the interactions between people and ERP implementation, with an emphasis on the learning aspect. We address the gaps between ERP development and its implementation and identify new quantitative approaches for analysing the interactions between people and ERP, using the Real Options concept for modelling. We make three important contributions to the literature. Firstly, we emphasise the importance of organisational learning in ERP implementation and evaluate its strategic value with a quantitative model. Secondly, illustrative data in conjunction with an analytical formula are elaborated on so that companies can easily understand and apply the evaluation method with spreadsheet software. Finally, we demonstrate that option-pricing theory can be applied to ERP projects to capture their real value.
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