1. Real Options Jrgen De Smet & Yves Hanoulle

2. Up-Front Decisions 3. You do not need to decide right now! 4. Only decide when to decide 5. Keep as many options open as possible 6. Actively gather information until you have to decide 7. You only commit when you must 8. When you have a good reason to 9. Why would you want to do that? 10. Later you are smarter 11. You can deal with risk 12. A real option has avalue 13. A real option hasexpiration criteria 14. A real option has apurchase cost 15. Common sense? 16. Comon Sense 17. Real options decision making Identify Options A B C Options 18. Real options decision making Identify Conditions A B C X or Y X and Y Z conditions 19. Real options decision making Identify Conditions A B C X or Y X and Y Z 20. Real options decision making Identify Conditions A C X or Y Z B X and Y 21. Real options decision making Time to decide A B C X or Y X and Y Z first decision point 22. Real options decision making wait for first condition A B C X or Y X and Y Z ? 23. Real options decision making Refine options A2 B C X or Y X and Y Z 24. Real options decision making Find new options B C X and Y Z D Y A2 X or Y 25. Real options decision making Push back decision B C X and Y Z D Y A2 X or Y C Z 26. Real options decision making Plan D? B C X and Y Z D Y A2 X or Y 27. This is great 28. Set based design 29. Design options

Vehicle designs

20 entered in a competition

5 worked out in detail

4 clay models made

2 prototypes made and revised

1 model chosen

30. Types of engines

80 types considered

narrowed down to 10 by testing

4 types after more extensive testing

1 selected after evalutation by computer simulations

31. Agile user stories 32. Test Driven Development 33. Dimensional planning Dirt road 34. Dimensional planning Cobblestone road 35. Dimensional planning Highway 36. Why is dimensional planning valuable? HeusdenAmsterdam 37. Why is dimensional planning valuable? Amsterdam Heusden (Belgium) Heusden (Netherlands) Who is paying for this expensive mistake? Letscreate a tighter contract so the customer does! 38. Why is dimensional planning valuable? Amsterdam Heusden (Belgium) Heusden (Netherlands) 39. Why is dimensional planning valuable? Amsterdam Heusden (Belgium) Heusden (Netherlands) 40. Why is dimensional planning valuable? Amsterdam Heusden (Belgium) Heusden (Netherlands) 41. Why is dimensional planning valuable?

Dimensional Planning vs Cost?

• Amsterdam Heusden Belgium : Dirt Road

• Amsterdam Heusden Netherlands: Dirt Road

• Amsterdam Heusden Netherlands: Cobblestone

• VS

• Amsterdam Heusden Belgium Highway

• +

• Amsterdam Heusden Netherlands????

42. Why is dimensional planning valuable? 43. Real options vs Change Requests 44. Get real

Generate as much options as possible

Identify the conditions and expiration timing

Decide when to decide

Actively go for more info

Go for multiple options if needed

Wait as long as possible

Decide fast

45. Resources

http://www.agilecoach.net/html/Real%20Options%20handout.pdf

The Toyota Way-Jeffrey Liker, pp 239-240:http://www.amazon.com/The-Toyota-Way-ebook/dp/B000SEGIVS

Koen van Exem:http://www.inxin.com/wiki/DimensionalPlanning

Software by Numbers:http://www.amazon.com/Software-Numbers-Low-Risk-High-Return-Development/dp/0131407287/

Jrgen De Smet & Yves Hanoulle