Community Forum – How do you track R&D project execution performance?
An IRI member organization would like to benchmark with peers to determine how your organization tracks execution performance. They are evaluating the measures they use to evaluate accomplishments and appreciate you taking a minute to complete the following survey.
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- We track revenue/margin from new products; number of launches, etc.
- Milestone Tracking Alone
- Succesful trials
- Timing vs scheduled
- Successful deployment of technology
- Cycle time to answer killer question
- Potential value and related confidence limits
- Time from project approval to commercialization
- Use stoplight-like 1-page summaries to communicate status
- Progress towards next decision gate
- Projects in Front End are more general, NPD projects more detailed
- Project and portfolio prioritization meetings and status reports
- Simplified Gantt Charts
- Also perform a post-launch review to capture key learnings
- Financial return to the company
- NPV return
- Tangible value generation
- Time to commercialization and cumulated $ revenue per month after commercialization
6. Please describe what tools or methods your organization uses that you would consider “best practice” for estimating the cost of an R&D project?
- Comparing the scope of the new project vs. ones in the recent past with similar scope and deliverables. Doing so at a macro level is typically more effective than building it up from the micro level, as the errors propagate, when you’re adding several terms together.
- I don’t think we do anything unusual to estimate the cost. However, we regularly update that cost estimate throughout the life of the project.
- We use an integrated project management software (Planview entreprise) that helps us track project schedules, financials and stage gate decisions.
- We leverage past projects and a comprehensive time tracking system.
- For development projects we track Shareholder Value Added which is OP Profit minus cost of capital. For resource cost we estimate the % of time for each person involved and apply a standard cost per role to estimate resource cost. Both are simple calculations in a spreadsheet.
- Is there a best practice – we employ a decision gate process which means the accuracy is better to the next decision. Uncertainty in cost and return improves as you progress through TRL stages.
- Mostly based on past experience and past projects.
- Work breakdown structure for hours required; supplies and equipment/equipment time; assumptions of number of iterations based on prior experience in related or similar projects.
- Multiple bids on a project with similar SOW
- Most costly aspect of R&D projects are the opportunity cost for Principle Investigators (PI’s). We therefore track PI resource time allocation closely and estimate costs by % of resource time allocation (that assumes a certain amount or lab overhead). We multiply that % by a average cost number for a PI.
- Not at all an exact science but we use historical resource allocation on different classes of projects as a smell test for requested resources at project outset.
- Time and materials. We generally have 2 phases: 1. startup/scoping – short term, low level of effort to plan project
2. Actual project – more details T&M. Extensions go up management chain based on cost/schedule changes.
- Maintaining and advancing core product technical knowledge
- Solutions for clients/other business units