Authors:
Vassilis C. Gerogiannis
1
;
Androklis Mavridis
2
;
Pandelis G. Ipsilandis
1
and
Ioannis Stamelos
2
Affiliations:
1
Technological Education Institute of Larissa, Greece
;
2
Aristotle University of Thessaloniki, Greece
Keyword(s):
Iterative/Incremental Software Projects, Real Options Analysis, Timeboxing.
Related
Ontology
Subjects/Areas/Topics:
Engineering Information System
;
Enterprise Information Systems
;
Information Systems Analysis and Specification
;
Management Information Systems
Abstract:
In an iterative/incremental software project, software is built in a sequence of iterations with each of them providing certain parts of the required functionality. To better manage an incremental delivery plan, iterations are usually performed during pre-specified time boxes. In a previous work, we addressed the problem of optimizing the schedule of incremental software projects which follow an iterative, timeboxing process model (TB projects). We approached scheduling as a multi criteria decision problem that can be formulated by a linear programming model aimed to overcome some “rigid” simplifications of conventional timeboxing, where durations of time boxes and stages are equal and a priori fixed. In this paper, we move this decision making process one step forward by applying real options theory to analyze the investment risks associated with each alternative scheduling decision. We identify two options in a TB project. The first is to stall (abandon) the development at a pre-de
fined iteration, while the second is to continue (expand) development and deliver the full functionality. Thus, we provide the manager the flexibility to decide the most profitable (valued) combination of delivered functionalities, at a certain iteration, under favourable or unfavourable conditions.
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