Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You and Your Team.

Learn More →

Application of real options analysis to technology portfolio planning: a case study

Application of real options analysis to technology portfolio planning: a case study Purpose – The concepts of real options analysis, which transfer options analysis for financial investments to those involving real properties, such as land and plant facilities, have already existed for 30 years. However, the actual application of real options analysis to technology portfolio planning has not been as widespread as expected. Among others, a major barrier to such applications appears to be a lack of appreciation and acceptance of real options by technology executives. This case study aims to present a successful application experience of real options analysis to technology portfolio planning and highlights the lessons learned in overcoming such lack of acceptance and other barriers. Design/methodology/approach – The paper uses a case study approach. The methodology focuses on describing the key issues and solutions for applying real options analysis in the technology portfolio‐planning process of a company. Findings – The findings in this paper showed that considerable barriers exist in the acceptance of real options analysis for technology portfolio planning. However, the experience in the case study provides successful approaches for overcoming these barriers. Originality/value – The paper shows that few studies are available on the difficulties of introducing real options analysis in practical applications. This paper provides a valuable case study for such applications. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Quality & Reliability Management Emerald Publishing

Application of real options analysis to technology portfolio planning: a case study

Loading next page...
 
/lp/emerald-publishing/application-of-real-options-analysis-to-technology-portfolio-planning-kwyRIRbHxu
Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
0265-671X
DOI
10.1108/02656710810843577
Publisher site
See Article on Publisher Site

Abstract

Purpose – The concepts of real options analysis, which transfer options analysis for financial investments to those involving real properties, such as land and plant facilities, have already existed for 30 years. However, the actual application of real options analysis to technology portfolio planning has not been as widespread as expected. Among others, a major barrier to such applications appears to be a lack of appreciation and acceptance of real options by technology executives. This case study aims to present a successful application experience of real options analysis to technology portfolio planning and highlights the lessons learned in overcoming such lack of acceptance and other barriers. Design/methodology/approach – The paper uses a case study approach. The methodology focuses on describing the key issues and solutions for applying real options analysis in the technology portfolio‐planning process of a company. Findings – The findings in this paper showed that considerable barriers exist in the acceptance of real options analysis for technology portfolio planning. However, the experience in the case study provides successful approaches for overcoming these barriers. Originality/value – The paper shows that few studies are available on the difficulties of introducing real options analysis in practical applications. This paper provides a valuable case study for such applications.

Journal

International Journal of Quality & Reliability ManagementEmerald Publishing

Published: Jan 11, 2008

Keywords: Portfolio investment; Options markets; Property management

There are no references for this article.