Measuring the life-cycle value of enduring systems

A goal of systems development is to produce enduringly valuable product systems—i.e., systems that are valuable when delivered to their users and which continue to be attractive to their stakeholders over time. However, quantifying the life-cycle value (LCV) provided by a system has proven elusive. In this paper, we propose an approach to quantifying a system’s LCV based on the key parameters that have perceived value to the system’s stakeholders. For this, we draw upon insights from the management, marketing, product development, value engineering, and systems engineering literature. We then demonstrate our proposed approach with an example of a cellular telephone system. By designing systems for maximum LCV, systems architects and engineers will provide dramatically increased value to their organizations and other stakeholders. However, to provide maximum LCV, a system may need to be designed to facilitate adaptability to changing circumstances and stakeholder preferences. We conclude the paper with discussions of some of the major difficulties in measuring LCV and some of the opportunities for further research in this area. © 2008 Wiley Periodicals, Inc. Syst Eng 11: 187–202, 2008