Real options, learning cost and timing software upgrades Towards an integrative model for enterprise software upgrade decision analysis》.pdf

Int. J. Production Economics 168 (2015) 211–223 Contents lists available at ScienceDirect Int. J. Production Economics journal homepage: /locate/ijpe Real options, learning cost and timing software upgrades: Towards an integrative model for enterprise software upgrade decision analysis Horatio M. Morgan a,1, Ojelanki Ngwenyama b,c,n,2 a Ted Rogers School of Management, Ryerson University, Canada b Institute of Innovation and Technology Management Ryerson University, Canada c Faculty of Commerce, University of Cape Town, South Africa a r t i c l e i n f o a b s t r a c t Article history: A key challenge facing information technology (IT) managers is how to carefully analyze the decision Received 7 November 2014 options available to them when considering enterprise software infrastructure upgrades. We present an Accepted 28 June 2015 illustrative case that not only captures the trade-offs involved in retaining an existing software Available online 6 July 2015 infrastructure as opposed to adopting a new one at an appropriate time, but also demonstrates how Keywords: the combined application of various analytical tools including real options analysis may provide richer IT decision model information than a single approach. Our model offers IT managers the potential to arrive at a deeper Learning-based approach understanding of software upgrade timing decisions while ge