In the quest for innovation and competitive advantage, the primary enabler is research and development (R&D) spending. Even the most efficient operations-oriented enterprises realize that cost reduction has its limits and must be balanced by the need for new products, services and innovative ways of working.
While there may be increased levels of R&D spending across businesses, those investments aren’t always productive. In fact, a study involving over 10,000 analyses of R&D spending across the 1,000 largest R&D spenders found no statistical correlation between R&D spend and sales growth, gross profit growth, operating profit growth, operating margin, net profit growth, net margin, market cap growth or total shareholder return.1
Although effective project and portfolio management is critical to R&D investment results, it often is not performed well. Over a five-year period ending in 2016, an annual survey of project management practitioners and executives found that two-thirds of projects did not meet original goals/business intent, one-half were not completed within the original budget and one-half were not completed within the original schedule, and 15% of projects were deemed to be a failure.2
Here is a look across different types of challenges and questions to consider to improve return on investment.