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Full-Text Articles in Physical Sciences and Mathematics
Option-Based Risk Management: A Field Study Of Sequential Information Technology Investment Decisions, Michel Benaroch, Mark Jeffery, Robert John Kauffman, Sandeep Shah
Option-Based Risk Management: A Field Study Of Sequential Information Technology Investment Decisions, Michel Benaroch, Mark Jeffery, Robert John Kauffman, Sandeep Shah
Research Collection School Of Computing and Information Systems
This field study research evaluates the viability of applying an option-based risk management (OBRiM) framework, and its accompanying theoretical perspective and methodology, to real-world sequential information technology (IT) investment problems. These problems involve alternative investment structures that bear different risk profiles for the firm, and also may improve the payoffs of the associated projects and the organization's performance. We sought to surface the costs, benefits, and risks associated with a complex sequential investment setting that has the key features that OBRiM treats. We combine traditional, purchased real options that subsequently create strategic flexibility for the decision maker, with implicit or …
Value-At-Risk In It Services Contracts, Robert J. Kauffman, Ryan Sougstad
Value-At-Risk In It Services Contracts, Robert J. Kauffman, Ryan Sougstad
Research Collection School Of Computing and Information Systems
As information systems (IS) and technology solutions become increasingly service-driven, managers are faced with the task of choosing parameters such as service-levels, pricing, and contract duration. Information technology (IT) services vendors manage portfolios of contracts in which parameters, decided at inception, are often subject to future risks. The contract profit maximization decision may adversely affect the risk position of the firm's portfolio of services contracts. We propose a model to inform vendors on setting optimal parameters for IS contracts subject to acceptable levels of risk. The analytic model presented draws from IS economics research and the principles of value-at-risk (VaR) …