Using portfolio theory to support requirements selection decisions

Selecting requirements for a release of software is a difficult undertaking as people have trouble comparing requirements of different types and have natural biases towards short-terms gains over longer-term sustainability. Portfolio theory is proposed as a solution to this problem, as it provides a...

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Bibliographic Details
Main Authors: FogelstroĢˆm, Nina D, Numminen, Emil, Barney, Sebastian
Format: Conference Proceeding
Language:English
Subjects:
Investments
Market-driven development
Marketing and sales
portfolio theory
Portfolios
product management
Programming
real options theory
requirements selection
Software
software product
Technological innovation
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Summary:Selecting requirements for a release of software is a difficult undertaking as people have trouble comparing requirements of different types and have natural biases towards short-terms gains over longer-term sustainability. Portfolio theory is proposed as a solution to this problem, as it provides a method for balancing investment options to maximize the likelihood of a given return. This approach is explored generally and through an example. The results suggest portfolio theory can be applied for this purpose. Applying portfolio theory to determine the amount of development time that should be spent on different types of requirements shows the most potential, especially when data on expected risks and returns is limited.
DOI:10.1109/IWSPM.2010.5623864