Application of real options theory to DoD software acquisitions
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Authors
Olagbemiro, Albert
Mun, Johnathan
Shing, Man-Tak
Subjects
Software engineering
Advisors
Date of Issue
2009
Date
2009
Publisher
Monterey, California. Naval Postgraduate School
Language
Abstract
The traditional real options valuation methodology, when enhanced and properly formulated around a proposed or existing software investment employing the spiral development approach, provides a framework for guiding software acquisition decision-making by highlighting the strategic importance of managerial flexibility in managing risk and balancing a customer's requirements within cost and schedule constraints. This article discusses and describes how an integrated risk management framework based on real options theory could be used as an effective risk management tool to address the issue of requirements uncertainty as it relates to software acquisition and, therefore, guide the software acquisition decision-making process.
Type
Technical Report
Description
Series/Report No
Department
Graduate School of Business & Public Policy (GSBPP)
Organization
Graduate School of Business & Public Policy (GSBPP)
Identifiers
NPS Report Number
NPS-GSBPP-09-019
Sponsors
Funder
Format
x, 33 p.: col. ill.;28 cm.
Citation
Distribution Statement
Approved for public release; distribution is unlimited.