Performance measurement of R&D projects in a multi-project, concurrent engineering environment

Abstract An R&D Project can be characterized by its life cycle with three phases of evolution, viz., Project Selection Phase (Screening, Evaluation, Selection), Project Execution Phase (Technology Development, Product Development, Performance Demonstration) and Implementation Phase (Production, Marketing, Sales). The traditional approach of performance measurement deals with each of these phases in isolation. As a result, the evaluation models and performance measurement criteria are separate for each phase. Once a project is selected, all attention is focused on its completion within the stipulated time and cost, without much consideration to either the assumptions made at the time of project selection or the requirements of the implementation phase. As a result, performance measurement system for project execution phase is totally independent of other phases. In an R&D environment with high uncertainty and complexity, coupled with multiple projects competing for limited common resources, use of different models of evaluation at different phases may lead to incorrect assessment and poor overall performance. This paper addresses this important issue and suggests a framework for an Integrated Performance Index encompassing the entire lifecycle of R&D projects. The framework identifies the key factors in each phase of the project lifecycle and integrates them through a formula to derive an Integrated Performance Index that can be used to measure the overall performance of a project at any point of time during its life cycle.

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