Innovative features selection using Real Options Theory

Mahvish Khurum, Sebastian Barney

3rd International Workshop on Software Product Management (IWSPM), September 2009


Fulltext: PDF

Publisher DOI: 10.1109/IWSPM.2009.3


Innovation enables product differentiation and supports market growth. However, determining the value of an innovative feature is a difficult task due to the number of risks and uncertainties involved. This paper proposes the use of real options theory to support software product managers to decide whether to make an investment in an innovative feature or not. This approach creates a richer decision space, allowing for more informed decision- making, leading to greater return on potential.