We know from option theory that it is never optimal to exercise an option except in the prescence of a large dividend. Anything that allows us to delay decisions gives us more value.
Agile methodologies delay decisions whereas waterfall methodologies force decisions to be made earlier than necessary.
Waterfall methodologies insist that the business user makes all the requirements decisions up front. Waterfall methodologies insist that all design decisions are made up front. They then try to control change by making it as difficult as possible through a strict change control mechanism.
Agile Methodologies allow requirement and design decisions to be delayed. Thus Agile keeps options open.
To reiterate a statement from previous blogs. The only way to effectively manage uncertainty is to use options.
Posted by chrismatts at April 3, 2004 9:26 AMJohn Favaro has some papers on this type of thing at http://www.favaro.net/john/home/publications/
Posted by: Jason Yip at April 4, 2004 10:07 PM