Integrated Portfolio Analysis: Return on Investment and Real Options Analysis of Intelligence Information Systems (Cryptologic Carry On Program)
Abstract
This paper introduces the Knowledge Value Added/Real Options (KVA+RO) valuation framework for use in information technology (IT) portfolio management within the Navy. KVA+RO is designed to support IT portfolio investment decisions. It is intended to empower decision-makers by providing performance-based data and analyses like the Return On Investment (ROI) on individual projects, programs, and processes within a portfolio of IT investments. Using KVA historical data as a platform, the authors evaluate potential strategic investments with real options analysis. The first section discusses limitations of existing ROI approaches. The paper then presents the KVA+RO methodology and framework and reviews core concepts, underlying assumptions, metrics, and potential applications to the IT portfolio management problem in the Department of Defense (DoD). In the final section, the KVA+RO valuation framework is applied to Naval Cryptologic Carry On Program (CCOP) systems that are used in the Intelligence Collection Process (ICP) for evaluation of signal intelligence gathering system investments.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 30, 2006
- Accession Number
- ADA458432
Entities
People
- Cesar G. Rios Jr.
- Johnathan C. Mun
- Thomas Housel
Organizations
- Naval Postgraduate School