Real Options<br />Jürgen De Smet & Yves Hanoulle<br />
What do you know about Real options?<br />Nothing<br />A LOT<br />Little bit<br />2<br />
What do you want to learn?<br />3<br />3<br />
Up-front decisions<br />Up-Front Decisions<br />4<br />
You don’t need to decide right now!<br />5<br />
Only decide when to decide<br />6<br />
Keep as many options open as possible<br />7<br />
Actively gather information until you have to decide<br />8<br />
You only commit when you must<br />9<br />
when you have a good reason to<br />10<br />
Why do you want to do that?<br />11<br />
Later you are smarter<br />12<br />
you can deal with risks<br />13<br />
a real option has a value<br />14<br />
a real option has experiation criteria<br />15<br />
a real option has a cost<br />16<br />
Common sense?<br />17<br />
Common sense for teams<br />18<br />
Real options decision making – Identify Options<br />A<br />B<br />Options<br />C<br />19<br />
Real options decision making – Identify Conditions<br />A<br />X or Y<br />B<br />conditions<br />X and Y<br />C<br />Z<br...
Real options decision making – put on timeline<br />A<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />21<br />
Real options decision making – Identify deadline<br />A<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />22<br />
Real options decision making – Time to decide<br />A<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />first decision poi...
Real options decision making – wait for first condition<br />A<br />?<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />2...
Real options decision making – Refine options<br />A2<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />25<br />
Real options decision making – Find new options<br />A2<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />D<br />Y<br />2...
Real options decision making – Push back decision<br />A2<br />X or Y<br />B<br />X and Y<br />C<br />C<br />Z‘<br />Z<br ...
Real options decision making – Plan D?<br />A2<br />X or Y<br />B<br />X and Y<br />C<br />Z‘<br />D<br />Y<br />28<br />
This is great<br />29<br />
Set based design<br />30<br />
Vehicle designs<br />20 entered in a competition<br />5 worked out in detail<br />4 claymodels made<br />2 prototypes made...
80 types considered<br />narrowed down to 10 by testing<br />4 types after more extensive testing<br />1 selectedaftereval...
 agile user stories<br />33<br />
Test Driven Development<br />34<br />
Dimensional planning – Dirt road<br />35<br />
Dimensional planning – Cobblestone road<br />36<br />
Dimensional planning – Highway<br />37<br />
Why is dimensional planning valuable?<br />Amsterdam<br />highway<br />Heusden <br />38<br />
Why is dimensional planning valuable?<br />Heusden (Netherlands)<br />Amsterdam<br />highway<br />Who is paying for this e...
Why is dimensional planning valuable?<br />Heusden (Netherlands)<br />Amsterdam<br />Heusden (Belgium)<br />40<br />
Why is dimensional planning valuable?<br />Heusden (Netherlands)<br />Amsterdam<br />Heusden (Belgium)<br />41<br />
Why is dimensional planning valuable?<br />highway<br />Heusden (Netherlands)<br />Amsterdam<br />Heusden (Belgium)<br />4...
Why is dimensional planning valuable?<br />Dimensional Planning vs Cost?<br />Amsterdam – Heusden Belgium : Dirt Road<br /...
Why is dimensional planning valuable?<br />44<br />
 Story Mapping<br />45<br />
 Real options vs Change requests<br />46<br />
Generate as much options as possible<br />Identify the conditions and expiration timing<br />Decide when to decide<br />Ac...
 Look back at your questions...<br />48<br />48<br />
http://www.agilecoach.net/html/Real%20Options%20handout.pdf<br />The Toyota Way-Jeffrey Liker, pp 239-240: http://www.amaz...
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Real options

  1. 1. Real Options<br />Jürgen De Smet & Yves Hanoulle<br />
  2. 2. What do you know about Real options?<br />Nothing<br />A LOT<br />Little bit<br />2<br />
  3. 3. What do you want to learn?<br />3<br />3<br />
  4. 4. Up-front decisions<br />Up-Front Decisions<br />4<br />
  5. 5. You don’t need to decide right now!<br />5<br />
  6. 6. Only decide when to decide<br />6<br />
  7. 7. Keep as many options open as possible<br />7<br />
  8. 8. Actively gather information until you have to decide<br />8<br />
  9. 9. You only commit when you must<br />9<br />
  10. 10. when you have a good reason to<br />10<br />
  11. 11. Why do you want to do that?<br />11<br />
  12. 12. Later you are smarter<br />12<br />
  13. 13. you can deal with risks<br />13<br />
  14. 14. a real option has a value<br />14<br />
  15. 15. a real option has experiation criteria<br />15<br />
  16. 16. a real option has a cost<br />16<br />
  17. 17. Common sense?<br />17<br />
  18. 18. Common sense for teams<br />18<br />
  19. 19. Real options decision making – Identify Options<br />A<br />B<br />Options<br />C<br />19<br />
  20. 20. Real options decision making – Identify Conditions<br />A<br />X or Y<br />B<br />conditions<br />X and Y<br />C<br />Z<br />20<br />
  21. 21. Real options decision making – put on timeline<br />A<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />21<br />
  22. 22. Real options decision making – Identify deadline<br />A<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />22<br />
  23. 23. Real options decision making – Time to decide<br />A<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />first decision point<br />23<br />
  24. 24. Real options decision making – wait for first condition<br />A<br />?<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />24<br />
  25. 25. Real options decision making – Refine options<br />A2<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />25<br />
  26. 26. Real options decision making – Find new options<br />A2<br />X or Y<br />B<br />X and Y<br />C<br />Z<br />D<br />Y<br />26<br />
  27. 27. Real options decision making – Push back decision<br />A2<br />X or Y<br />B<br />X and Y<br />C<br />C<br />Z‘<br />Z<br />D<br />Y<br />27<br />
  28. 28. Real options decision making – Plan D?<br />A2<br />X or Y<br />B<br />X and Y<br />C<br />Z‘<br />D<br />Y<br />28<br />
  29. 29. This is great<br />29<br />
  30. 30. Set based design<br />30<br />
  31. 31. Vehicle designs<br />20 entered in a competition<br />5 worked out in detail<br />4 claymodels made<br />2 prototypes made and revised<br />1 model chosen<br /> Design options<br />31<br />31<br />
  32. 32. 80 types considered<br />narrowed down to 10 by testing<br />4 types after more extensive testing<br />1 selectedafterevalutation by computer simulations<br /> Type of engines<br />32<br />
  33. 33. agile user stories<br />33<br />
  34. 34. Test Driven Development<br />34<br />
  35. 35. Dimensional planning – Dirt road<br />35<br />
  36. 36. Dimensional planning – Cobblestone road<br />36<br />
  37. 37. Dimensional planning – Highway<br />37<br />
  38. 38. Why is dimensional planning valuable?<br />Amsterdam<br />highway<br />Heusden <br />38<br />
  39. 39. Why is dimensional planning valuable?<br />Heusden (Netherlands)<br />Amsterdam<br />highway<br />Who is paying for this expensive mistake?<br />Heusden (Belgium)<br />Lets create a tighter contract so the customer does!<br />39<br />
  40. 40. Why is dimensional planning valuable?<br />Heusden (Netherlands)<br />Amsterdam<br />Heusden (Belgium)<br />40<br />
  41. 41. Why is dimensional planning valuable?<br />Heusden (Netherlands)<br />Amsterdam<br />Heusden (Belgium)<br />41<br />
  42. 42. Why is dimensional planning valuable?<br />highway<br />Heusden (Netherlands)<br />Amsterdam<br />Heusden (Belgium)<br />42<br />
  43. 43. Why is dimensional planning valuable?<br />Dimensional Planning vs Cost?<br />Amsterdam – Heusden Belgium : Dirt Road<br />Amsterdam – Heusden Netherlands: Dirt Road<br />Amsterdam – Heusden Netherlands: Cobblestone<br />VS<br />Amsterdam – Heusden Belgium Highway<br />+<br />Amsterdam – Heusden Netherlands ????<br />43<br />
  44. 44. Why is dimensional planning valuable?<br />44<br />
  45. 45. Story Mapping<br />45<br />
  46. 46. Real options vs Change requests<br />46<br />
  47. 47. Generate as much options as possible<br />Identify the conditions and expiration timing<br />Decide when to decide<br />Actively go for more info<br />Go for multiple options if needed<br />Wait as long as possible<br />Decide fast<br /> Get Real<br />47<br />
  48. 48. Look back at your questions...<br />48<br />48<br />
  49. 49. http://www.agilecoach.net/html/Real%20Options%20handout.pdf<br />The Toyota Way-Jeffrey Liker, pp 239-240: http://www.amazon.com/The-Toyota-Way-ebook/dp/B000SEGIVS<br />Koen van Exem: http://www.inxin.com/wiki/DimensionalPlanning<br />Software by Numbers: http://www.amazon.com/Software-Numbers-Low-Risk-High-Return-Development/dp/0131407287/<br />http://leanprocrastination.com/blog/2011/09/a-backlog-is-waste-fill-it-later/ <br />Resources<br />Jürgen De Smet & Yves Hanoulle<br />49<br />

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