Value based analysis of acquisition portfolios

Abstract

Currently, program-funding allocation is based on program performance. Funding cuts commonly lead to a poor reflection on the program management assigned to the given program. If additional factors such as program risk and benefit are objectively factored in, this may lead to a more effective exit strategy for program capabilities, which are no longer required. An enterprise architecture analysis and applied framework case study were carried out to develop a methodology to quantify system-level value for the Office of the Assistant Secretary of the Air Force for Acquisition Research, Development, Test and Evaluation portfolio. Portfolio value is quantified in order to transition from a single program, single stakeholder value analysis to a program portfolio and stakeholder system composite analysis. This methodology is developed based on interviews, official organization literature, and a case study. The results of the applied framework case study on a portfolio of seven programs showed a positive correlation between quantitative capability, execution and risk data at the portfolio level and access to a more informed and objective identification of programs of greatest interest and concern as compared to a qualitative program-by-program analysis when allocating Air Force Acquisition resources. This system includes 17 stakeholder categories, which significantly influence the allocation of resources for a portfolio worth roughly 0.4% of the US GDP. Interviews include high-ranking leadership, including two 3-Star Generals in the US Air Force.