Integrated portfolio analysis: return on investment and real options analysis of intelligence information systems (cryptologic carry on program)

摘要

This paper introduces the Knowledge Value Added/Real Options (KVA+RO) valuation framework. KVA+RO is designed to support information technology (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, potential strategic investments are valuated with real options analysis. The first section discusses limitations of existing ROI approaches. The paper then presents KVA+RO methodology and framework, reviews core concepts, underlying assumptions, metrics and potential applications to the IT portfolio management problem in the DoD. In the final section, the KVA+RO valuation framework is applied to Naval Cryptologic Carry On Program (CCOP) systems used in the Intelligence Collection Process (ICP) for evaluation of information warfare systems investments.--p. i.