TY - JOUR
T1 - Application of Taguchi model to valuation of information security technology considering security quality failure
AU - Jeong, Yujin
AU - Yoon, Byungun
N1 - Publisher Copyright:
© 2018, © 2018 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2020/7/3
Y1 - 2020/7/3
N2 - As interests in intangible assets in a digital economy have been growing, technology valuation is becoming increasingly more important in information technology management. Most existing valuation methods do not reflect the unique characteristics of technology. Thus, this paper aims to suggest an approach for technology valuation that considers the nature of information security technology. First, technological value is evaluated by scoring value factors that are used to analyse the intrinsic characteristics and application of technology. Second, to evaluate the market value, the expected profit of the technology will be deduced by using an income approach, reflecting on the characteristics of information security products and services. The weighted sum of factors from the previous scoring process plays a role in adjusting the expected profit. Third, the Taguchi loss function is applied to calculate the amount of social loss incurred due to the lower quality level of security. The final result of technology valuation is presented by integrating the expected profit and social loss. The proposed approach is illustrated with a case of safe symmetric key algorithm, one of information security technologies in Korea. The results of technology valuation will provide objective information for technology transfer and the selection of R&D projects.
AB - As interests in intangible assets in a digital economy have been growing, technology valuation is becoming increasingly more important in information technology management. Most existing valuation methods do not reflect the unique characteristics of technology. Thus, this paper aims to suggest an approach for technology valuation that considers the nature of information security technology. First, technological value is evaluated by scoring value factors that are used to analyse the intrinsic characteristics and application of technology. Second, to evaluate the market value, the expected profit of the technology will be deduced by using an income approach, reflecting on the characteristics of information security products and services. The weighted sum of factors from the previous scoring process plays a role in adjusting the expected profit. Third, the Taguchi loss function is applied to calculate the amount of social loss incurred due to the lower quality level of security. The final result of technology valuation is presented by integrating the expected profit and social loss. The proposed approach is illustrated with a case of safe symmetric key algorithm, one of information security technologies in Korea. The results of technology valuation will provide objective information for technology transfer and the selection of R&D projects.
KW - income approach
KW - information security technology
KW - information technology valuation
KW - R&D project selection
KW - security quality
KW - social impacts
KW - Taguchi loss function
UR - http://www.scopus.com/inward/record.url?scp=85086862542&partnerID=8YFLogxK
U2 - 10.1080/14783363.2018.1468246
DO - 10.1080/14783363.2018.1468246
M3 - Article
AN - SCOPUS:85086862542
SN - 1478-3363
VL - 31
SP - 1112
EP - 1134
JO - Total Quality Management and Business Excellence
JF - Total Quality Management and Business Excellence
IS - 9-10
ER -