A model for information systems evaluation

ERP value has been long assumed to be static in traditional evaluations. This study proposes a stochastic simulation model of ERP business value, which bridges the gap between ERP business value theories and modern finance evaluation approaches. By incorporating life cycle, the critical characteristic of ERP business value, uncertainty is explicitly accounted for in the model. We quantitatively justify the value of ERP by taking life cycle uncertainty tracking into account, which is more realistic for ERP investments in real world settings.