ERP-ORE: A Framework to Measure Organizational Risk during ERP Systems Evolution in a Distribution Business

Aditya Agrawal, Bond University, Queensland
Gavin Finnie, Bond University, Queensland
Padmanabhan Krishnan, Bond University, Queensland

Abstract

Enterprise Resource Planning systems evolution initiatives often represent the single largest investment (and therefore risk) for distribution corporations yet there exist few management frameworks in the literature to help decision makers measure risk during this organization-wide change process. We have customized our original ORE framework as a multi-criteria, relative risk, condition consequence management decision framework enabling executive decision makers in distribution businesses to calculate and compare risk evolution at fixed points of the ERP change cycle. The framework emphasizes the political and process dimensions of evolution and utilizes the Analytic Hierarchy Process to enable management to make structured and balanced risk mitigation decisions. This paper describes the development of ORE into ERP-ORE and illustrates the application of the framework through a case study description of a medical supplies distributor implementing an ERP system.