This is the accepted version of the paper.This version of the publication may differ from the final published version. The effective deployment of enterprise systems has been a major challenge for many organizations. Customizing the new system, changing business processes, and integrating multiple information sources are all difficult tasks. As such, they are typically done in carefully planned stages in a process known as phased implementation. Using ideas from option theory, this paper critiques aspects of phased implementation. One customer relationship management (CRM) project and its phased implementation are described in detail and ten other enterprise system deployments are summarized as a basis for the observation that almost all deployment stages are pre-defined operational steps rather than decision points. However, option theory suggests that optional stages, to be used only when risk materializes, should be integral parts of project plans. Although such optional stages are often more valuable than pre-defined stages, the evidence presented in this paper shows that they are only rarely utilized. Therefore, a simple framework is presented; it first identifies risks related to the deployment of enterprise systems, then identifies optional stages that can mitigate these risks, and finally compares the costs and benefits of both pre-defined and optional stages.
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