R&D Performance Analysis: Case Studies on the Challenges and Promotion of the Evaluation and Measurement of R&D

Abstract

Due to the intense international competition, demanding, and sophisticated customers, and diverse transforming technological change, organizations need to renew their products and services by allocating resources on research and development (R&D). Managing R&D is complex, but vital for many organizations to survive in the dynamic, turbulent environment. Thus, the increased interest among decision-makers towards finding the right performance measures for R&D is understandable. The measures or evaluation methods of R&D performance can be utilized for multiple purposes; for strategic control, for justifying the existence of R&D, for providing information and improving activities, as well as for the purposes of motivating and benchmarking. The earlier research in the field of R&D performance analysis has generally focused on either the activities and considerable factors and dimensions - e.g. strategic perspectives, purposes of measurement, levels of analysis, types of R&D or phases of R&D process - prior to the selection of R&Dperformance measures, or on proposed principles or actual implementation of theselection or design processes of R&D performance measures or measurement systems. This study aims at integrating the consideration of essential factors anddimensions of R&D performance analysis to developed selection processes of R&D measures, which have been applied in real-world organizations. The earlier models for corporate performance measurement that can be found in the literature, are to some extent adaptable also to the development of measurement systemsand selecting the measures in R&D activities. However, it is necessary to emphasize the special aspects related to the measurement of R&D performance in a way that make the development of new approaches for especially R&D performance measure selection necessary: First, the special characteristics of R&D - such as the long time lag between the inputs and outcomes, as well as the overall complexity and difficult coordination of activities - influence the R&D performance analysis problems, such as the need for more systematic, objective, balanced and multi-dimensional approaches for R&D measure selection, as well as the incompatibility of R&D measurement systems to other corporate measurement systems and vice versa. Secondly, the above-mentioned characteristics and challenges bring forth the significance of the influencing factors and dimensions that need to be recognized in order to derive the selection criteria for measures and choose the right R&D metrics, which is the most crucial step in the measurement system development process. The main purpose of this study is to support the management and control of the research and development activities of organizations by increasing the understanding of R&D performance analysis, clarifying the main factors related to the selection of R&D measures and by providing novel types of approaches and methods for systematizing the whole strategy- and business-based selection and development process of R&D indicators.The final aim of the research is to support the management in their decision making of R&D with suitable, systematically chosen measures or evaluation methods of R&D performance. Thus, the emphasis in most sub-areas of the present research has been on the promotion of the selection and development process of R&D indicators with the help of the different tools and decision support systems, i.e. the research has normative features through providing guidelines by novel types of approaches. The gathering of data and conducting case studies in metal and electronic industry companies, in the information and communications technology (ICT) sector, and in non-profit organizations helped us to formulate a comprehensive picture of the main challenges of R&D performance analysis in different organizations, which is essential, as recognition of the most importantproblem areas is a very crucial element in the constructive research approach utilized in this study. Multiple practical benefits regarding the defined problemareas could be found in the various constructed approaches presented in this dissertation: 1) the selection of R&D measures became more systematic when compared to the empirical analysis, as it was common that there were no systematic approaches utilized in the studied organizations earlier; 2) the evaluation methods or measures of R&D chosen with the help of the developed approaches can be more directly utilized in the decision-making, because of the thorough consideration of the purpose of measurement, as well as other dimensions of measurement; 3) more balance to the set of R&D measures was desired and gained throughthe holistic approaches to the selection processes; and 4) more objectivity wasgained through organizing the selection processes, as the earlier systems were considered subjective in many organizations. Scientifically, this dissertation aims to make a contribution to the present body of knowledge of R&D performance analysis by facilitating dealing with the versatility and challenges of R&D performance analysis, as well as the factors and dimensions influencing the selection of R&D performance measures, and by integrating these aspects to the developed novel types of approaches, methods and tools in the selection processes of R&D measures, applied in real-world organizations. In the whole research, facilitation of dealing with the versatility and challenges in R&D performance analysis, as well as the factors and dimensions influencing the R&D performance measure selection are strongly integrated with the constructed approaches. Thus, the research meets the above-mentioned purposes and objectives of the dissertation from the scientific as well as from the practical point of view.