By: James Wall
July 11, 2023

Managing R&D can be very challenging. It is important to make sure that all projects are progressing on schedule and utilizing funding efficiently. Critical objectives must be met and it is important to know when projects need to be terminated or re-examined due to unmet goals, objectives, or deadlines. Most importantly, management needs to be able to determine where additional funds will make the biggest impact. We believe that Results Based Accountability (RBA) and Clear Impact Suite is the perfect software to use for R&D applications.

Table of Contents:

  1. Importance of Performance Management in R&D
  2. Current Approaches to R&D Management
  3. Why Are Current Approaches Ineffective?
  4. How can Suite and its Compyle and Scorecard features be used to implement Performance Management Concepts in R&D?
  5. Helpful Links

1. Importance of Performance Management in R&D

Progress in R&D has traditionally been measured using system inputs, such as dollars per project and number of researchers per active project. According to Stephen Altmann (of BASF) in a 2019 interview, “Developing an innovative product requires having a good idea about how to get effectively and efficiently from the idea at the front end to break even after a maximum number of years in the market.” To do this, outputs must be measured against inputs using performance metrics to determine progress at each stage of the R&D process and accurately assess the level of technology maturity. This challenge is a perfect application for Results Based Accountability.

2. Current Approaches to R&D Management

Hannon, et al suggest that “the most common approach takes the ratio of R&D’s costs to revenue. This method divides revenue from products developed in the past by what’s currently being spent on products for the future.” However, the same article suggests that this is a pessimistic assumption for investing in future growth, and “Indeed, repeated studies have shown no definite correlation between this R&D ratio and any measure of a company’s success.”

3. Why Are Current Approaches Ineffective?

This one single metric measurement of performance has been proven ineffective because there is no single metric that can accurately represent performance, instead, there are many performance metrics at different stages that should be used. “at one time, R&D’s productivity mattered less. But today, myriad competitive forces drive down R&D budgets, and nearly every company we know—even those investing heavily in growth—continues to ask the R&D organization to achieve more with the same or fewer resources.” This is why it is no longer efficient to determine productivity just by comparing cost and revenue. Due to the need to measure multiple metrics and factors at each stage of development, software that can measure a large number of inputs is certainly a necessity.

Clear Impact Software Suite

Collect, organize, analyze, and report the data you need to implement RBA effectively.

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4. How can Suite and its Compyle and Scorecard features be used to implement Performance Management Concepts in R&D?

So how can Clear Impact Suite be used to implement Performance management concepts in R&D? Suite offers software that can be customized to fit a specific project or multiple projects at once. This would allow private firms to pick their performance metrics and objectives and input them into Suite. They can use the Scorecard feature to track individual researchers’ or teams’ progress as well as funding and efficiency. The Compyle feature could be used to map deadlines and build a timeline for volume production. These indicators and the data produced using Clear Impact Suite will allow firms to better predict how long they will have to wait to see revenue generation from various levels of input.     

5. Helpful Links

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