TVP – Metric 19 Rating Technology Features and Benefits

Background | User Guide | Program Contents | Stakeholders | List of Metrics

1. Metric Definition

The value of technology output from an R&D organization according to objective product features and benefits, customer ratings, economic value.  Metrics are suggested for products and processes.

1.1 Product Features & Benefits

a. Metric 1: Competitive Technical Performance of Product (Project Metric)

The comparison of technical performance of a product in those dimensions where the customer is likely to perceive a benefit. This may be used in a prospective sense to appraise the value of a feature or in a retrospective sense to register the value of a benefit which the market has recognized.

Examples include:

• The use level required to achieve a needed result in the customer application.
• The yield strength of a high-performance alloy
• The measured softness provided by a textile softener.
• The measured UV resistance of an external architectural coating.

b.  Metric 2: Customer rating of Products (Business Segment or Firm)

Customer rating using a scale of one to five to rate the technology benefits that is perceived in a firm’s products. This can be compared to the rating for the best competitor, usually in the form of a ratio. This is an aggregate subjective measure for a business segment or for the firm.

c. Metric 3: Economic Value of Products (Project, Business Segment, or Firm)

This metric is the price differential per unit obtained by virtue of the technology feature minus the cost of providing the feature. The differential can be multiplied by the volume to assess the total benefit to the firm.

d. Metric 4: Market Share Evaluation (Business Segment or Firm)

If differential pricing does not occur, the advantages of superior product technology can appear as differential market share. In this case, the relative market share (the firm’s share divided by the largest share) can be used as a surrogate for the value of technology embodied in the products.

1.2 Process Features & Benefits

e. Metric 5: Competitive Technical Performance of Process (Project Metric)

Comparison of technical performance of a product in those dimensions which are important to manufacturing cost or product performance. This may be used in a prospective sense to appraise the expected value of a new or improved process or in a retrospective sense to register the demonstrated value.

Examples include:

• Manpower requirements
• Efficiencies of raw material conversion
• By-product or co product costs or values
• Consistency, controllability, and other such quality parameters

f. Metric 6: Economic Value of Processes (Project, Business Segment, or Firm)

The differential in profitability (vs. the target or competitor) attributable to new or improved process technology.

g. Metric 7: Profitability Evaluation of Processes (Business Segment or Firm)

In the same way that market share is a surrogate measure of product performance in those business areas where the basis of competition is product performance, overall profitability in a business segment of the firm is a measure of process performance, in those business areas where the basis of competition is cost and/or quality.

2. Advantages and Limitations

Product metrics one through four attempt to assign value to technology used in products. However, differential value or market share are normally the result of many different factors. These metrics can give some indications if factors are carefully sifted, but may be misleading if the analysis is superficial. Objective measurement of product performance and customer ratings relative to competitors are the most accurate measures of product technology. But note that comparison of features that the market has not recognized as benefits may be self-serving and deceptive. Competitive rankings of measured product performance and or customer ratings may be averaged over market segments or over the firm to obtain average values.

Process metrics five through seven attempt to assign value to new or improved process technology resulting from R&D. However, economic value and profitability are normally the result of many different factors. Objective measurement of process performance is the most accurate measure of process technology.

3. How to use the Metric

Metric 1

Define the key parameters which measure features the customer is likely to perceive as benefits. Measure product performance as accurately as methods allow. Compare to the same measurements of competitive products. Rank performance vs. best competitors.

Metric 2

Ask customers to rate the technology attributes of a product line relative to solving their problems. This requires a carefully constructed survey instrument.

Metric 3

This metric is valid for products which are differentiated by performance. It is not applicable to commodity products.

Metric 4

See Definition

Metric 5

Define the key parameters which measure or impact cost or quality. Measure process performance as accurately as methods allow. Compare to the same measurements of competitive processes. Rank performance vs. best competitors.

Metric 6

See Definition

Metric 7

See Definition
These metrics may be used retrospectively to measure the output of R&D over the past period and prospectively to set targets for future accomplishments. 

4. Options & Variations

There are many variants on these metrics. Exploring these is beyond the scope of this document.

5. Champions and Contacts

6. References

15-2 Ellis, L. W., and Curtis, C. C. 1995. Measuring Customer Satisfaction. Research-Technology Management, 38(5), pp. 45-48.
15-4 Kaplan, R.S. and Norton, D. P. 1993. Putting the Balanced Scorecard to Work, Harvard Business Review, September-October, 134-147.