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Managing Information Technology Investment Risk: A Real Options Perspective, Michel Benaroch

Management - All Scholarship

Past information systems research on real options has focused mainly on evaluating information technology (IT) investments that embed a single, a-priori known option. However, since real options are not inherent in any IT investment, they usually must be planned and intentionally embedded in a target IT investment in order to control various investment-specific risks, just like financial risk management uses carefully chosen options to actively manage investment risks. Moreover, when an IT investment involves multiple risks, there could be numerous ways to reconfigure the investment using different series of cascading (compound) options. In this light, we present an approach for …