Deciding whether to acquire an ALM model1 and how capable of a model to choose is fundamentally a capital budgeting decision. The same benefit versus cost methodology governing the choice of a new core processing system, for example, applies.
The question is whether the level of expected future benefits, compared to current and expected future costs, is favorable. If yes, the action signal is on. If no, then no action is the right answer.
Let us begin by looking at how to choose the right level of ALM model (i.e., how powerful it is) by developing a conceptual decision framework. This establishes the global benefits and costs associated with an ALM model as a component of an overall ALM process solution. This same framework will apply later, when you buy a specific ALM model.Download