Capability and Development Risk Management in System-of-Systems Architectures: A Portfolio Approach to Decision-Making

Abstract

In a capability-centered acquisition paradigm, with many interacting and interdependent systems, new approaches are needed for addressing the architecting and acquisition of individual systems to achieve capability targets. Prior research work has explored the use of a Computational Exploratory Model (CEM; Mane & DeLaurentis, 2011) and a Markov network model (Mane, DeLaurentis, & Frazho, 2011) to evaluate complex development networks of system-of-systems (SoS) architectures. The present paper complements this line of work with a portfolio management approach as a decision tool in the acquisition and integration of systems within an SoS context. The approach leverages potential SoS-level capability gains from the integration of individual systems against cost and developmental risks due to system interdependencies. An example application using the Littoral Combat Ship is provided to demonstrate the approach. Congruence of the method in relation to potential benefits of system vendor-level competition in light of open architecture (OA) considerations is also addressed.