Research and Development Options Approach
In an article, "Uncovering the Hidden Value in High Risk Investments". David Sharp (1991) proposes a more complex "options" approach.
Options are valuable; they provide the ability to take advantage of certain opportunities at a later time. In real estate terminology, an option is a right purchased for a fee to buy or sell property within a specified time and at a specified price. The value of an option may actually increase with uncertainty and project duration. Options analysis should consider expenditures for both incremental DSS development and maintaining flexibility to build a future DSS. The Research and Development Options Approach has 3 steps:
This approach can be difficult to explain to managers and MIS staff. The key issue is expanding DSS opportunities.