A decision framework for R&D project selection

The development of novel and high-tech products is essential in order to give a company the edge over its competitors. Having a product of technical superiority in a company\´s product range can be a significant advantage, hence the importance of good R&D. With almost universally limited R&D budgets and large numbers of potential projects that could be pursued, the ability to consistently select optimal projects to fund is vitally important. Investment in the most promising R&D projects and the balancing of a company\´s R&D portfolio will correctly align the company in its chosen market places, helping it to meet future strategic targets. In this paper we present a project selection model that recognises the different types of R&D projects and their particular requirements. This is achieved through the use of a composite model incorporating a qualitative scoring stage, risk analysis and financial considerations. These three established techniques are contained with a single framework. The model is designed to be applicable to all types of research in all sizes of firms. It is intended to provide a formal, structured methodology to assist engineers and management in the decision making process. This composite model has the benefit that in addition to a formal recording of the decision making process, communication of the importance of the "nonassessable" factors, particularly relating to basic research, is also provided.