The Investment Analysis component
contains analytics that provide information on the likely outcome
and value of a potential investment. Use Investment analysis to build
financial models of expected cost and estimated benefits of your project
over time. All of the financial metrics that Investment analysis provides
are useful, but no single metric, by itself, will necessarily cover
the whole requirement. You must analyze all the metrics and determine
the ones that best meets your requirements. Estimates are uncertain
entities. To express the uncertainty of your estimates, specify the
values for likely; or nominal estimates with high and low bounds.
These bounded estimates are used to compute the likely financial metrics
for the project.
Product managers and financial executives in development projects,
and portfolio management programs in software and systems organizations
can use Investment analysis to arrive at better investment decisions.
For example, product managers can use Investment analysis to identify
various business cases for product enhancements. Investment analysis
can help in driving credible financial discussion within product management,
finance team and executive team to identify the assumptions of the
business case and drive a more standard way of expressing the business
case.
The expected costs and benefits of incomplete programs are uncertain
and must be specified by using random variables. The cost and benefit
streams vary within a project and also from project to project. The
financial metrics of incomplete programs are calculated using the
Monte Carlo simulation. Several key computations must be considered
when building a financial model:
- Costs: The expected costs to complete the project and expected
costs after delivery
- Benefits: Expected revenue after delivery and expected
revenue and cost savings from reuse
- Risk: Combined uncertainty in estimated costs and benefits
Use Investment analysis to perform these actions:
- Enter data graphically in the grid section to quickly create data
point estimates.
- Enter data to a time grid by using a spreadsheet.
- Use the command line to enter algebraic equations explicitly as
assignment expressions and distribution types.
- Create calculator tapes and load existing tapes.
- Define project-wide global variables and variables that change
over the timeline of your project.
- Save the calculator results directly to a time period for a given
stream with a cost or benefit selected in the open model.
- Add a financial model stream that does not contain cost or benefit
values by using time series variables.
Additionally,
IBM® Rational® Focal Point™ version
6.5.2 supports these actions for Investment analysis:
- Define the default variables and calculator tapes in the time
grid setup.
- Set the visibility level of calculator tape.
- Add or change a comment in a stream.
- Define the units for benefit, cost, and time series variables.
- Launch investment analysis directly without going to the time
grid mode.
- New output attributes: Payback period as a distribution, ROI to
date, and ROI to go.