Justifying investments in new information technologies
Journal of Management Information Systems
Putting the enterprise into the enterprise system
Harvard Business Review
Managing risks in IT projects: an options perspective
Information and Management
A Case for Using Real Options Pricing Analysis to Evaluate Information Technology Project Investment
Information Systems Research
International Journal of Systems Science
Journal of Management Information Systems
E-Health Care Information Systems: An Introduction for Students and Professionals
E-Health Care Information Systems: An Introduction for Students and Professionals
Active ERP implementation management: A Real Options perspective
Journal of Systems and Software
An integrated decision making approach for ERP system selection
Expert Systems with Applications: An International Journal
A real option theoretic fuzzy evaluation model for enterprise resource planning investment
Journal of Engineering and Technology Management
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Nowadays healthcare organizations globally recognize the importance of investing in information technologies to improve the quality of care delivery and reduce costs. The key drivers of healthcare sector such as continuously improving healthcare standards and insurance systems have introduced new requirements for hospitals, which in return provided a solid ground for decision-makers to consider implementing hospital information systems that are customized and improved versions of enterprise resource planning (ERP) systems designed according to the needs of the healthcare sector. The conventional discounted cash flow methods ignore the value of managerial and strategic flexibility inherent in these investments, which is crucial for justification of the investment decision. This study introduces a real options-based methodology which overcomes the limitations of traditional valuation methods and enables decision-makers to value an ERP system investment incorporating multiple options. The option valuation model developed in this study extends the binomial lattice framework to model a hospital information system (HIS) investment opportunity with compound options. The potential application of the proposed model is illustrated through evaluation of a real-world HIS investment.