Uncertainty and Enterprise Integration - A Real Options View

Enterprise integration (EI) involves integrating business processes and data across organizations, systems, and applications and is a key spending priority for CIOs according to the consulting firm Gartner. Enterprise integration however represents an investment scenario fraught with a good deal of uncertainty on account of rapidly changing markets, technologies, and standards. EI represents a rich and dynamic market with ever-shifting boundaries, complex XML-based technology stacks, and a proliferation of standards. Complex and uncertain investment scenarios are best approached from the increasingly important real options (RO) valuation methodology. This paper develops a taxonomy of use cases of enterprise integration, assesses the uncertainty inherent in these use cases, and then develops decision-making heuristics based on the RO notion of Strategic Net Present Value (SNPV) for approaching investment decisions in EI

A Conceptual Framework for Understanding Trust Building and Maintenance in Virtual Organizations

The issue of trust development in traditional organizations has been widely discussed in the academic literature for several years. Recently, scholars have also studied trust development in temporary groups and have noted some fundamental differences between the manner in which trust develops in traditional organizations and the manner in which it develops in temporary groups. Virtual organizations are a new type of organization characterized by traits of both traditional organizations and temporary groups. This paper integrates the literature on trust in virtual organizations and the perspectives of trust development in both traditional organizations and temporary groups to develop a process-based framework which facilitates the understanding of trust development in the virtual organization setting

The use of logarithmic transformation and numerical derivatives for business performance data

The value of plotting business performance data over time on a semi-logarithmic graph has been advocated, but in a somewhat off-hand and intuitive way. While examples have been discussed, no mathematical justification has been given. In this paper, we give such a justification in order to underscore, and perhaps acquaint the reader with this simple yet powerful graphics tool. We also discuss and illustrate an extension of the idea underlying this technique. These methods are particularly useful with spreadsheet packages which inculude graphics capabilities

Decision Factors for the Adoption and Continued Use of Online Direct Sales Channels among SMEs

Although more and more small and medium-sized enterprises (SMEs) use the Internet for business purposes, few of them have adopted the Internet as an online direct sales channel (ODSC). Among those that do use the ODSC, some end up abandoning it after adoption. This study explores a few critical factors underlying the initial adoption and continued use of online direct sales channels among SMEs. Synthesizing existing works, we construct an innovation adoption decision factors classification framework that classifies innovation decision factors into three dimensions: decision entity factors, decision object factors, and context factors. We then operationalize these factors in the context of SMEs’ initial adoption and post-adoption continued use of online direct sales channels. We conduct a survey study on SMEs within the United States. The results demonstrate that an SME’s initial adoption and post-adoption continued use of an ODSC involve different sets of decision factors. Furthermore, results demonstrate a learning effect within adopting firms that implies they perceive the relative advantage of ODSC differently in comparison to pre-adopters

A Maximum Decisional Efficiency Estimation Principle

This paper proposes a systematic approach to certain parameter estimation problems relevant to applied optimization models. A context-specific measure of decision maker performance called decisional efficiency is defined as a function of the unknown parameter vector. The values of this measure are considered to be distributed according to a performance density. Then a principle of Maximum Decisional Efficiency (MDE) is proposed and its relationship to the Maximum Likelihood principle of statistics is discussed. The principle is first illustrated on a problem of group ideal point estimation. Next, estimation of the ratio of ordering and holding costs in inventories managed by the EOQ model is considered. The results in both these examples are intuitively appealing, suggesting face validity of the principle. A more detailed illustration is developed for the problem of deriving a consensus scoring model for credit applicants which combines the data of more than one loan officer.estimation, inverse optimization, indirect consensus, multiattribute valuation