Zimmermann, Steffen and Mueller, Marcel and Heinrich, Bernd (2016) Exposing and selling the use of web services-an option to be considered in make-or-buy decision-making. DECISION SUPPORT SYSTEMS, 89. pp. 28-40. ISSN 0167-9236, 1873-5797
Full text not available from this repository. (Request a copy)Abstract
The emergence of the web service market has enabled firms to choose between developing web services internally and purchasing them externally from web service providers. In general, these so-called make-or-buy decisions have been the object of intense debate in the IT outsourcing literature. However, characteristics of web services such as loose coupling and the current trend of digitalizing application interfaces enable new opportunities especially to non-software firms: when a firm decides to develop a web service internally (make-decision), it has the option of exposing and selling the use of this web service after its internal development (sell option). In this paper, we propose a normative approach for the valuation of such a sell option based on real option theory, taking into account the characteristics of web services. This approach enhances traditional make-or-buy approaches by additionally considering this sell option in decision-making. Our results are twofold: (I) the sell option has considerable impact on traditional make-or-buy decisions and makes the internal development of web services more attractive; (II) it is preferable to execute the sell option as soon as possible after completion of the internal development of the web service. (C) 2016 Elsevier B.V. All rights reserved.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | DEVELOPMENT COST ESTIMATION; REAL OPTIONS; INFORMATION-TECHNOLOGY; MEAN REVERSION; DEVELOPMENT-PROJECTS; SOFTWARE; INVESTMENT; MANAGEMENT; RISK; UNCERTAINTY; Make-or-buy decisions; Web services; Real option theory; Sell option; Web service market |
| Subjects: | 600 Technology > 650 Management & auxiliary services |
| Divisions: | Business, Economics and Information Systems > Institut für Wirtschaftsinformatik > Lehrstuhl für Wirtschaftsinformatik II (Prof. Dr. Bernd Heinrich) |
| Depositing User: | Dr. Gernot Deinzer |
| Date Deposited: | 04 Apr 2019 13:36 |
| Last Modified: | 04 Apr 2019 13:36 |
| URI: | https://pred.uni-regensburg.de/id/eprint/3440 |
Actions (login required)
 |
View Item |
