CAISE DC 2008 - Montpellier
Prediction Markets as an
Innovative Way to Manage
R&D Portfolios
Cédric Gaspoz, Faculty of Business and Economics

R&D Portfolio Management Process
« Theperiodic activity thatselection at
a
R&D project portfolio
aims
is
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. »
17th June 2008
2 Cedric.Gaspoz@unil.ch | CAiSE Doctoral Consortium 2008

R&D Portfolio Management Process
Framework
1 2 3
Maximizing Achieving a Building
the value of balanced strategy into
the portfolio portfolio the portfolio
●
Financial ●
Technology
●
Bubble
Models (NPV, Roadmaps
Diagrams
ECV, PI, ...) ●
Strategic
●
Portfolio Maps
●
Scoring Models Buckets
17th June 2008
3 Cedric.Gaspoz@unil.ch | CAiSE Doctoral Consortium 2008

R&D Portfolio Management Issues
Main issues of traditional
quantitative approaches:
● Selecting the right criteria
● Collecting the data
● Negotiating the portfolio
17th June 2008
4 Cedric.Gaspoz@unil.ch | CAiSE Doctoral Consortium 2008

Prediction Markets Principles
1 More than How many of us will 2 Price Qty
BUY 35
63% be assistant profes- shares at €70 80
sors at the end of €66
€66 35
EU
start
2012? SELL 35 €60 53
€ 63 shares at
new IS €57 12
project €66
4 3
Market settlement 31.12.2012 @ €68 EU Price Qty
project € 66 €70 80
35 * 68 = 2'380 35 * 66 = 2'310
- 35 * 66 = 2'310 - 35 * 68 = 2'380 €60 53
€57 12
€70 -€70 35@€66 -35@€66
17th June 2008
5 Cedric.Gaspoz@unil.ch | CAiSE Doctoral Consortium 2008

Prediction Markets Applications
Prediction Markets in Fortune 500 Companies
Predicting the Choosing the Forecasting Predicting the
number of bugs best new microchip prices date of product
in new software research ideas launches 17th June 2008
6 Cedric.Gaspoz@unil.ch | CAiSE Doctoral Consortium 2008

Research Methodology
PM for R&D portfolio mngt Design Appropriateness
• IT artefact • Case study in R&D community
• Claim ontology • Interviews
• Conceptual model • Comparison with other tools
Relevance Rigor
Develop / Build
Business Needs Applicable Knowledge
Assess Refine
Environment Knowledge
Justify / Evaluate Base
Application in the Environment Additions to the Knowledge Base
●
New DSS for R&D portfolio mngt ●
Design propositions and mechanisms
●
Guidelines to use PM in corporate ●
Appropriateness of PM to manage R&D
environment portfolios 17th June 2008
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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 Gaspoz
University of Lausanne
Faculty of Business and Economics
Information Systems Institute
CH-1015 Lausanne
cedric.gaspoz@unil.ch
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.
17th June 2008
8 Cedric.Gaspoz@unil.ch | CAiSE Doctoral Consortium 2008