Applying ArchOptions to value the payoff of refactoring

ArchOptions is a real-options based model that we have pro-posed to value the flexibility of software architectures in response to future changes in requirements. In this paper, we build on ArchOptions to devise an options-based model, which values the architectural flexibility that results from a refactoring exercise. This value assists in understanding the payoff of investing in refactoring: if the refactored system results in an architecture that is more flexible, such that the expected added value (in the form of options) due to the en-hanced flexibility outweighs the cost of investing in this exer-cise, then refactoring is said to payoff. We apply our model to a refactoring case study from the literature