WP6: Techniques for Analyzing the Value of Investment in a SPIRE Project

Duration: M19 – M28

Description of the approach: The research work in this WP will be devoted to examine the application of contemporary investment analysis techniques [58], such as Real Options Analysis [42, 59], to examine, at a certain SPI project, the value of the delivered improvements. The main objective of the work is to consider, by examining Real Options, the flexibility of management to decide the most profitable (valued) combinations (packages) of alternative improvement issues and candidate software components, under favourable or unfavourable conditions.

Selecting, for example, suitable software entities to adopt in a software project can be a challenging task, as along with the desired characteristics, come risks associated with the inherent quality. Despite source transparency in the FLOSS realm, the vast number of available open source components hinder the component selection process. To overcome this, various software evaluation methods have been proposed, offering assistance in measuring various qualities and aspects of software components. Examples are the Open Source Maturity Model (developed by Bernard Golden of Navicasoft), CapGemini Open Source Maturity Model and the more recent and enhanced BRR (Business Readiness Rating) for Open source [60] supported by SpikeSource, and Intel Corporation, among others (OpenBrFr.org). However, these methods fail to take into consideration the profit generated due to selected quality characteristics, and thus, to provide an additional value-based view to decision makers (managers of the SW company). Real Options theory has been proposed as a tool to enhance decision making, where alternatives are treated as “options” of an exercised value [42, 44].

In WP6 we will investigate the use of Real Options as a tool for assisting the components’ selection process in FLOSS development process. To achieve that, we will first employ state of the art in FLOSS project evaluation methods in order to identify the quality risks associated with the adoption of each candidate component, and we will move on to exploit the flexibility hidden in these risks with Real Options Analysis to calculate the system’s generated value. Research also is planned on applying Real Options to several OSS repositories and validating the approach in projects performed by the participating SW SMEs.

Deliverables:

D6.1: Techniques for Analyzing the Value of Investment in a SPIRE Project (M19-M28)

WP6 Leader: V.C. Gerogiannis

WP6 Members: I. Stamelos , E. Kouzari

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