Applying modern portfolio theory and the capital asset pricing model to DoD's information technology investments
VanOrden, Marc A.
Housel, Thomas J.
MetadataShow full item record
Program Managers (PMs) throughout the Department of Defense (DoD) were directed by the DoD Chief Information Officer to manage information technology (IT) investments as portfolios (to include Mission Areas, Subportfolios, and Components) within the DoD Enterprise. Managing portfolios of capabilities aligns IT with the overall needs of the warfighter, as well as the intelligence and business activities which support the warfighter. This thesis provides the detailed steps that PMs and Program Executive Officers (PEOs) should follow to closely manage their IT portfolios using the concepts described within Harry Markowitz' Modern Portfolio Theory. The first section will provide a demonstration of allocating revenue generated by a fictitious large corporation to the various sub-corporate levels and then applying Knowledge Value Added (KVA) in order to calculate a Return on Investment (ROI). The foundation of KVA analysis is that each subprocess output must be represented in common units of change; a price per unit of output is generated to allocate both cost and revenue at the subprocess level. The final section will apply a similar KVA analysis to the Naval Cryptologic Carry On Program (CCOP) systems to provide a public sector example.
Approved for public release, distribution unlimited
Showing items related by title, author, creator and subject.
Examining the Effects of Set Aside Policies on Competition and Growth for Small and Mid-Sized Suppliers Brown, Trevor L.; Girth, Amanda M. (Monterey, California. Naval Postgraduate School, 2017-03); SYM-AM-17-077We examine the federal small business set aside program and assess the impact of small business set asides on supplier competitiveness, program participation, and firm growth. We track the performance of over 700 small ...
Tate, David M.; Coonce, Thomas J.; Guggisberg, Michael R. (Monterey, California. Naval Postgraduate School, 2018-04-30); SYM-AM-18-050To a first approximation, acquisition programs never spend what they originally said they would spend when they began. In fact, the error bars around an initial cost estimate are much larger than is generally understood, ...
Kenley, C. Robert; El-Khoury, Bernard (Monterey, California. Naval Postgraduate School, 2012-04-30); NPS-AM-12-C9P21R02-086The GAO’s, NASA’s, and the DoD’s adoption of the technology readiness level (TRL) scale to improve technology management has led to the emergence of many TRL-based models that are used to monitor technology maturation, ...