Managing projects can get very complicated, very quickly. That’s something any project manager will attest to. Having the best tools in your arsenal makes things a lot easier, but unfortunately nothing is a one-size-fits-all. If you’re conducting research and development projects, your requirements can be very different to traditional project management.
This article breaks down exactly what the requirements are for research and development projects, and suggests what to look for in tools to address these. We’ll then suggest some examples of tools to look further into.
Taking a ‘portfolio-wide approach’ means considering R&D projects as a group, rather than as individually. It may seem obvious, but since R&D projects are by their nature unpredictable, focusing on each project individually can deliver unsustainable results. Taking a portfolio-wide approach avoids putting all your ‘eggs-in-one-basket’. Though it’s important to focus on those projects that deliver value, natural discrepancies can skew results. Evaluating your portfolio as a whole overcomes this, allowing you to understand the most significant trends in the data.
Since evaluation of a project portfolio as a whole is a data intensive activity, but with results that can offer valuable insight to your R&D department, we’d suggest investing in a tool for this. Project Portfolio Management tools are a good place to start in your journey to taking a portfolio-wide approach to R&D.
One of the most important things to look for in research and development project management tools is stage-gates. Not all R&D projects are made equal. For this reason, we need a way to filter out the promising from the less-promising. Stage-gates is a tried and tested way of achieving this. By making each stage-gate a criteria that a project has to fill before passing through, we can prioritise the higher performing projects. This means your team is best allocating their resources to the projects with highest success outcomes. Over the long term, this will see a better return-on-investment for your R&D department.
For more information on the importance of stage-gates in a research and development process, we suggest reading more here.
The purpose of stage-gates is to continually assess the viability and success potential of your projects. Building upon this, we want to be consistently assessing potential and viability using metrics that are relevant for your organisation. We do this by devising scoring methods.
The goal of scoring methods is to objectively assess projects, reducing the personal biases that may otherwise come into the equation. Scoring should therefore include opinions from a wide range of stakeholders, so that metrics are balanced. You may even wish to use a ‘balanced scorecard’. This allows you to give each metric a weighting, signifying its importance and therefore its impact on the final score.
You can read more about devising effective scoring methods in this paper.
NPV stands for net-present value. It’s a way of looking at R&D projects by their expected future cash flow. Net-present value is particularly useful for comparing project finances against one another. It can be a significant decision making factor, so should be considered in your assessment of projects.
Net-present value is typically favoured due to the fact that it is fairly simple compared to other costing or valuation methods. It also considers the time-value of money and focuses on the bottomline. It’s easily understood by stakeholders and budget controllers outside the R&D department.
Net-present value may be one of the most widely used methods for costing R&D projects, but it’s not the only one. One example of an alternative to NPV is ‘real options’. A fair amount of academic articles have evaluated the viability of real options, with mixed opinions. Ultimately, NPV is the most widely used, easily understood and favoured by most, so we’d suggest sticking to this.
Benefit tracking refers to the continual measurement and evaluation of projects after completion. Specifically, we’re looking at the impact of R&D projects here. Benefit tracking can get very complicated, and will need measurement frameworks that fit each project type. It’s very important however, as missing this means the return-on-investment is never fully understood.
For effective benefit tracking to take place, we would suggest consulting with experts. Follow our contact form here, and one of our team would be happy to explain the intricacies of benefit tracking in more detail.
We know gathering, consolidating and analysing R&D project data is important. What needs to be considered next is how this data is going to be interpreted. For stakeholders who are not directly involved in the R&D process, raw data can be difficult to digest. This can cause a lack of understanding and in worse cases, miscommunication. To avoid this, the R&D department should ‘package’ the data in a digestible and familiar format.
The best way to achieve this is through dashboards. A solid dashboard will provide a good amount of flexibility to the data processor, while not being so complicated that it requires high technical skill to operate. For large and complex R&D departments, you may opt for a business intelligence tool such as Tableau or Sisense. For most however, the built-in dashboarding functions that come with R&D project management software should have you covered.
In this article, we’ve looked at a few of the key elements that should be considered when managing R&D projects. We’ve also suggested some of the key features that you should look for in project management tools. When settling on a project management tool, you need to be aware that each will have their own strengths and weaknesses in different situations.
We’ve found that for very large organisations, whose R&D may be spread throughout their entire organisations. They may opt for something ready built on their existing ERP software. This can be software from providers such as Oracle, Microsoft, Salesforce and SAP.
For many R&D departments however, their requirements may not be met by their existing ERP provider. Likewise, organisations who do not have existing relationships with large software suppliers shouldn’t have to just for this purpose. Where this is the case, our team would be happy to point you in the right direction. Head over to our ‘contact us’ and one of our team will get back to you as soon as possible.