Unpacking the ERP investment decision: An empirical assessment of the benefits and risks


Most leading organizations, in all sectors of industry, commerce and government are dependent upon

ERP for their organizational survival. Yet despite the importance of the decision to adopt ERP and its

impact on the entire firm’s performance the IT literature has been in the large part silent on the nature

of the ERP investment decision. This study is the first of its kind to determine the preference structure

of senior managers around the organizational benefits and risks of adopting ERP. We present the

results which provide interesting insights into how managers’ perceive the benefit and risk factors

salient to the organization’s adoption decision. In line with prior research we found that improved

productivity, and information and planning are important drivers of the ERP adoption decision.

Moreover our findings reveal that the benefits of ERP are weighted almost twice as important as the

risks when making an ERP investment decision. However when it comes to risk, interestingly

managers consider issues such as top management commitment and vendor support as more

important than financial risk

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