A General Framework to Measure Organizational Risk during Information Systems Evolution and its Customization

Information systems change initiatives often represent the single largest investment (and therefore risk) for large corporations yet there exist few management frameworks in the literature to help decision makers measure risk during this organization-wide change process. The Organization Risk Evaluation (ORE) framework has been developed based on the design science paradigm as a multicriteria, relative risk, condition consequence, management decision framework enabling executive decision makers to calculate and compare risk evolution at fixed points of the change cycle and make structured and balanced risk mitigation decisions. Enterprise Resource Planning systems evolution initiatives in distribution companies are a model example of the defined problem. The ORE framework is customized into the ERP-ORE frame work to demonstrate its application. The ERP-ORE framework emphasizes the political and process dimensions of systems evolution and utilizes the Analytic Hierarchy Process to enable management to make disciplined risk mitigation decisions. The ERP-ORE framework is illustrated through a case study description of a medical supplies distributor implementing an ERP system. The focus is on the ERP system’s role as an information manager within the supply chain.