1 / 21

Managing R&D Projects

Managing R&D Projects. “In many areas it is not clear before the event who is in the innovation race, where the starting and finishing lines are, and that the race is all about. Even when all these things are clear, companies often start out wishing to be a leader and end up a follower!”

leilani-hopkins
Download Presentation

Managing R&D Projects

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Managing R&D Projects “In many areas it is not clear before the event who is in the innovation race, where the starting and finishing lines are, and that the race is all about. Even when all these things are clear, companies often start out wishing to be a leader and end up a follower!” (Pavitt, 1990)

  2. Managing R&D Projects • Introduction • What issues are there in selecting and evaluating projects? • How to evaluate projects? • How Viagra almost slipped away • R&D as 2 businesses • What are the other options to R&D internally? • Summary & recap

  3. What issues are there in selecting and evaluating projects?

  4. Key decisions in R&D Management decision making • How many projects do we invest in? • Which projects do we choose to invest in? • When to evaluate? • How much to invest in each?

  5. How many projects do we invest in? • Invest in many to avoid missed opportunities • Investment spread thinly • Invest heavily in fewer projects • Potential for missed opportunities

  6. Spreading Investment: Strategic Pressures on R&D Building knowledge for entire business Number of research areas Gaining greater depth of knowledge for a particular business Funding per area

  7. Evaluating Projects Why evaluate, and which projects to invest in?

  8. Why evaluate projects? Cumulative Expenditure & Investment NEW PRODUCT DEVELOPMENT PROCESS new concept applied research laboratory verification development demonstration of application and product engineering ROI revenue growth introduction maturity decline investment accumulated investment time 0 -12 -10 -8 -6 -4 -2 2 4 6

  9. Which Projects to Invest In?R&D Project Selection Criteria • Technical • Research direction & balance • Competitive Rationale • Patentability • Stability of the market • Integration & synergy • Market • Channel Fit • Manufacturing • Financial • Strategic Fit

  10. What does the process of evaluating projects look like? The Process of Evaluating Projects 60 ideas are evaluated for: Technical feasibility Financial feasibility Suitability 12 ideas worthy of evaluation through: Technical evaluation & market research analysis Number of research ideas 6 potential products worthy of further development & analysis 3 prototypes for technical and market testing 2 products launched 1 successful product Evaluation of research project ideas

  11. R&D Project Evaluation Criteria

  12. Issue: Is it easy to evaluate which projects to proceed? Risk? • How Pfizer’s Viagra almost slipped away • Viagra one of the world’s most recognised brands • A social icon with sales >$2bn • An unintended discovery • 13yrs to market • How to attract consumers without alienating them • But impotence market was small! • Why spend valuable R&D money on • such a small market?

  13. Strategic planning: R&D Supports 2 Business Activities The main business activity Licences & technology transfer technology based diversification • Business 1 • Corporate objectives • objectives; • strategy; • plans. Business 2 Unplanned projects worth exploiting. Projects warranting modification of existing corporate plans (B&Y) Projects selected to meet corporate needs (1-10) Provision of funds to R&D stated corporate needs Research & Development Allocation of funds to projects to satisfy corporate needs 1 2 3 4 5 Y X 6 7 8 9 10 Z Loosely controlled funds A B C D E Unplanned value no value

  14. Is internal R&D the only option? Types of R&D

  15. Organising Industrial R&D centralised laboratories internal R&D decentralised laboratories internal market industrial R&D contract collaborative external R&D consortium

  16. & Disney Sony-Ericsson A joint venture dependent on technology transfer

  17. Technological Collaboration & Disney • Internal R&D is now only one of many technology development options available to companies. • The technology base of a company is viewed as an asset that represents the technological capability of that company.   • The focus of these new activities is on external knowledge acquisition and assimilation.

  18. Acquisition of External Technology Knowledge Matrix The shaded area represents those technology acquisitions normally embraced by technology transfer High Level of understanding of the technology by external third parties Purchase existing products or manufacturing processes Seek possible R&D Strategic Alliances Purchase/license a patent Purchase know-how embodied within people & processes Explore external R&D contract possibilities Conduct Internal R&D Low Low High Level of understanding of the technology by the acquiring business

  19. Key Points • R&D project evaluation • It also supports a technology business • Technology collaboration

  20. How do we spread investment? (how much do we invest in each) Technology life cycles and S curves: e.g. Supercomputer Communication bottlenecks Multiprocessor computer Speed of light Rate of Technological progress Single-processor computer Amount of effort Source: Utterback & Abbernathy (1992)

More Related