Economic Desirability and Traceability of Complex Products

Mordechai Ben‐Menachem, Ilanit Madar-Gavious

Research output: Contribution to journalArticlepeer-review


The real values and benefits of Information Technologies are difficult to quantify and frequently even to identify accurately. Existing financial models such as Net Present Value have proven insufficient for complex products, for long‑ term corporate goals. IS projects and software‑rich products are decided upon while ignoring critical financial aspects, as the distance between the corporate product vision and the reality that engineers see may be very large. This paper maps between economics vis‑à‑vis IS‑based product management via an inter‑disciplinary approach, looking at the needs and exigencies of corporate management, IS project, products and software engineering. The basis for the article is a discussion of the difficulties in evaluation of the economic desirability of complex, software‑ rich products. It presents a dynamic corporate‑level model for economic profit evaluation designed to deal with the unique characteristics of such products, over many variants and versions, and the entire lifecycle. Given the extreme uncertainty of costs, benefits, risks and timeframes projections, the model facilitates real time reporting via an information system designed for management of Products, Portfolios and Projects. Whereas existing project management techniques such as Earned Value Management provide a general basis for managing project level activity, our model provides a longer‑term view to assess economic affects of corporate strategies over time. This is provided by a dynamic, Management Information System based aggregation of all product information, over an entire product lifecycle, with the objective to provide a knowledge base for corporate dynamic decision‑making. Concomitantly, the model fulfils Sarbanes‑Oxley Act of 2002 requirements for management assertion traceability of valid and accurate measures. These aspects co‑joined, from Sarbanes‑Oxley, back through multiple products, over myriad versions, and through automated requirements, design and testing tools, all combine to form an auditable management feedback loop that can be leveraged at multiple corporate management levels. The paper represents a significant step towards quality product decision‑making via a model that is meaningful, while also useful as it is leveraged through an automated tool set.
Original languageEnglish
Pages (from-to)155-166
JournalElectronic Journal of Information Systems Evaluation
Issue number3
StatePublished - 2008


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