A Conceptual Framework for Understanding Path Dependency and Technology Option Evaluation when Valuing IT Opportunities
Ashley R. Davis

Abstract
Organizations are struggling with evaluating technology options, many related to complex technologies like Enterprise Resource Planning (ERP) systems. Real options theory is one way for organizations to evaluate technology options. However, real options theory for complex technologies currently lacks organization contextualization. Path dependency theory addresses why sub-optimal technologies dominate the market. This paper addresses technology lock-in and behavioral lock-in due to path dependency occurring in complex technology implementations. This paper brings path dependency theory and real options theory together build a conceptual model of how behavioral and technological lock-in affect technology options using ERP systems as an example.

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