A framework to support service-oriented architecture investment decision

Research output: Chapters, Conference Papers, Creative and Literary Works (RGC: 12, 32, 41, 45)32_Refereed conference paper (with ISBN/ISSN)

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Author(s)

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Detail(s)

Original languageEnglish
Title of host publicationICIS 2010 Proceedings - Thirty First International Conference on Information Systems
StatePublished - 2010

Conference

Title31st International Conference on Information Systems, ICIS 2010
PlaceUnited States
CitySaint Louis, MO
Period12 - 15 December 2010

Abstract

Service-oriented architecture (SOA) is a system paradigm that structures business functions as loosely coupled services to enable business agility. SOA requires significant up-front investments, and in return, promises a vast array of benefits. Unfortunately, in contrast to the costs of the investment, monetary benefits associated with SOA are more difficult to measure. For one reason, benefits such as increased agility or improved flexibility are elusive in nature, making it harder to define metrics for their calculation. For another, SOA value is realized in long term under uncertainty, and traditional capital budgeting methods often fail to capture uncertainty when valuing investments. In this paper, we provide a decision framework to analyze the monetary impact of SOA investment in an organization. Combining traditional NPV analysis with option pricing models, our framework accounts for operational and strategic costs and benefits of SOA and proposes an extended investment value to support managerial investment decision.

Research Area(s)

  • It investment, Option pricing models, Real options, Service-oriented architecture

Citation Format(s)

A framework to support service-oriented architecture investment decision. / Ilk, Noyan; Goes, Paulo; Zhao, J.Leon.

ICIS 2010 Proceedings - Thirty First International Conference on Information Systems. 2010.

Research output: Chapters, Conference Papers, Creative and Literary Works (RGC: 12, 32, 41, 45)32_Refereed conference paper (with ISBN/ISSN)