About
Publication Information
Subscriptions
Permissions
Advertising
Journal Rankings
Best Article Award
Press Releases
Resources
Access Options
Submission Guidelines
Reviewer Guidelines
Sample Articles
Paper Calls
Contact Us
Submit & Review
Browse
Current Issue
All Issues
Featured
Latest
Topics
Videos
Cases
Subscribe
California Management Review
California Management Review is a premier academic management journal published at UC Berkeley
Search
Article Information
Beyond Valuation: 'Options Thinking' in IT Project Management
Fichman, Robert G., Mark Keil, and Amrit Tiwana
47
/
2
(
Winter
2005
):
74
-
96
Real options can be a powerful tool for quantifying the value of strategic and operational flexibility associated with uncertain IT investments. However, they also constitute a new way of thinking about how projects can be organized and managed to maximize upside potential while minimizing downside risk. This article explains how practitioners can incorporate options thinking into contemporary IT project management. Options thinking means recognizing real options and how they add value. Just as important is managing projects so that the option value that exists in theory is realized in practice. Several real-world examples illustrate how the value of embedded real options can be realized through active project management. There are pitfalls associated with each option, as well as benefits and limitations of different approaches to valuing options. Organizations must decide whether to undertake the challenges of adopting options thinking as a project management philosophy.