Prediction Markets as an Innovative Way to Manage R&D Portfolios
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Prediction Markets as an Innovative Way to Manage R&D Portfolios CAISE DC 2008 - Montpellier Cédric Gaspoz, Faculty of Business and Economics
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R&D portfolio management is a critical task with which the majority of the large companies are confronted. Despite its wide implementation in companies there are no widely accepted and used methods to perform this task. Each company uses its own mix of various qualitative and quantitative methods to achieve its goal. The objective of this thesis is to explore the adequacy and the design issues to use a prediction market for supporting the R&D portfolio management process. We chose prediction markets to perform this task since their aggregation mechanisms and information discovery process seems to solve most of the current issues of the R&D portfolio management process.
Transcript of Prediction Markets as an Innovative Way to Manage R&D Portfolios
Prediction Markets as an Innovative Way to Manage R&D Portfolios
CAISE DC 2008 - Montpellier
Cédric Gaspoz, Faculty of Business and Economics
[email protected] | CAiSE Doctoral Consortium 20082
17th June 2008
R&D Portfolio Management Process
« The R&D project portfolio selection is a periodic activity that aims at optimizing the research effort of the company, while enabling it to select a portfolio, which corresponds to its strategic objectives and without exceeding the resources available.»
[email protected] | CAiSE Doctoral Consortium 20083
17th June 2008
Maximizing the value of the portfolio
Achieving a balanced portfolio
Building strategy into the portfolio
1 2 3
R&D Portfolio Management Process Framework
● Financial Models (NPV, ECV, PI, ...)
● Scoring Models
● Bubble Diagrams
● Portfolio Maps
● Technology Roadmaps
● Strategic Buckets
[email protected] | CAiSE Doctoral Consortium 20084
17th June 2008
R&D Portfolio Management Issues
Main issues of traditional quantitative approaches:
● Selecting the right criteria
● Collecting the data
● Negotiating the portfolio
[email protected] | CAiSE Doctoral Consortium 20085
17th June 2008
Prediction Markets Principles
How many of us will be assistant profes-sors at the end of 2012?
€ 63
EU start
new IS project
Price Qty€70 80€66 35€60 53€57 12
More than 63%
SELL 35 shares at
€66
BUY 35 shares at
€66
Price Qty€70 80€60 53€57 12
€ 66
35@€66 -35@€66
Market settlement 31.12.2012 @ €68
€70 -€70
35 * 68 = 2'380- 35 * 66 = 2'310
35 * 66 = 2'310- 35 * 68 = 2'380
1 2
EU project
34
[email protected] | CAiSE Doctoral Consortium 20086
17th June 2008
Prediction Markets Applications
Prediction Markets in Fortune 500 Companies
Predicting the number of bugs in new software
Choosing the best new research ideas
Forecasting microchip prices
Predicting the date of product launches
[email protected] | CAiSE Doctoral Consortium 20087
17th June 2008
Research Methodology
Business Needs Applicable Knowledge
Environment KnowledgeBase
Relevance Rigor
Application in the Environment
PM for R&D portfolio mngt• IT artefact• Claim ontology• Conceptual model
Design Appropriateness• Case study in R&D community• Interviews• Comparison with other tools
● New DSS for R&D portfolio mngt● Guidelines to use PM in corporate
environment
● Design propositions and mechanisms ● Appropriateness of PM to manage R&D
portfolios
Additions to the Knowledge Base
Develop / Build
Justify / Evaluate
Assess Refine
[email protected] | CAiSE Doctoral Consortium 20088
17th June 2008
The research presented in this slideshow is available as a research paper on the website of the author:
http://www.hec.unil.ch/cgaspoz/en/publications.html
Cédric GaspozUniversity of LausanneFaculty of Business and EconomicsInformation Systems InstituteCH-1015 Lausanne
Cédric Gaspoz's research focuses on information aggregation, primarily to support decision making. He explores ways of aggregating disseminated information to structure it and increase it's significance. His research covers a broad range of topics like prediction markets, group decision support systems (GDSS), negotiation support systems (NSS), semantic search and Mashup. His actual focus is on using prediction markets to support portfolio management of research projects in mobile information and communication systems.
